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Postal Service hints at bailout in delaying Saturday service cuts

April 10, 2013 by NCC Staff


The United States Postal Service won’t challenge Congress in its fight to end Saturday mail deliveries, but it’s also hinted that taxpayers could pay a price for the move.

Photo by Alexander Marks via Wikimedia Commons
Source: Alexander Marks (Wikimedia Commons).

Postal Service leaders said on Wednesday they have dropped plans to limit deliveries to five days a week as a needed cost-saving measure, because of language added to the current federal budget.

“By including restrictive language in the Continuing Resolution, Congress has prohibited implementation of a new national delivery schedule for mail and packages,” the Postal Service Board of Governors said in a statement.

The board also hinted strongly that if Congress doesn’t take additional measures, the Postal Service would need taxpayer help to stay in business.

“It is not possible for the Postal Service to meet significant cost reduction goals without changing its delivery schedule--any rational analysis of our current financial condition and business options leads to this conclusion. Delaying responsible changes to the Postal Service business model only increases the potential that the Postal Service may become a burden to the American taxpayer, which is avoidable,” the Board said.

The Postal Service gets limited direct funding from Congress, but Congress has oversight of the agency through its constitutional powers. The Postal Service had hoped to save $2 billion annually by cutting back on Saturday services.

It was established by the Constitution in 1787. Article 1, Section 8 of the Constitution enumerates the powers of Congress, including the power to establish and maintain post offices, along with roads to support the service.

On March 21, Congress passed its final continuing resolution for the current fiscal year.

At the time, Postal Service spokesman David Partenheimer said that if Congress couldn’t find a way to work with the Postal Service to adapt to the marketplace, taxpayers would face a $47 billion bailout in the next four years.

That deadline could come as soon as this October, by some estimates.

The General Accounting Office didn’t give a doomsday date for the Postal Service in a February 2013 report, but its conclusion was that Congress needed to move quickly.

“If Congress does not act soon, USPS could be forced to take more drastic actions that could have disruptive, negative effects on its employees, customers, and the availability of reliable and affordable postal services,” the group said.

If Congress is forced to bail out the Postal Service, it would be costly, but not by a record-breaking amount.

According to data from Pro Publica, four other recent government bailouts of financial institutions topped the $50 billion mark: Fannie Mae ($116 billion), Freddie Mac ($71 billion), AIG ($68 billion), and General Motors ($50 billion).

Senator Tom Carper of Delaware and Representative Darrell Issa of California are overseeing efforts in the Senate and the House to come up with bipartisan postal legislation, an effort that failed in the 112th Congress.

The website Federal Times said earlier this week that a version of a new postal bill in Congress could be coming up for discussion in the near future, according to an official at the Association for Postal Commerce.

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