The U.S. Senate has given postal workers at the Lacey postal sorting center a reprieve over the summer, but no one knows when or if Congress will act to stabilize the financial crisis at the U.S. Postal Service.
The Lacey sorting center, along with one in Tacoma, was scheduled to be closed and its operations consolidated in Seattle. Similar closures in Eastern Washington would have moved the sorting center to Spokane. It was part of the Postal Service’s plan to trim expenses and stem operating losses.
The USPS also planned to close many small rural post offices and eliminate Saturday delivery among other cost-reducing actions.
These plans were put on hold for now because Congress finally decided to begin correcting the problem it created in 2006. A late Senate bill, awaiting approval by the House, would inject $11 billion into the USPS and stave off the most Draconian aspects of the Postal Service’s expense savings plan.
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In 2006, Congress passed a law requiring the USPS to set aside profits that would fund employee retiree health benefits for 75 years into the future. That’s a burden no private corporation or any other government agency has to carry.
The Postal Service hasn’t received any tax dollars for the last 30 years, and has been reasonably profitable – at least self-sustaining – during the recession. According to National Association of Letter Carriers, 85 percent of the USPS’s red ink results from the $5.5 billion annual payment it makes in September to pre-fund the health benefits.
The Senate bill would loosen the benefit plan funding requirements and actually refund nearly $7 billion in over-funded payments to date.
The Postal Service still has other problems to address, to be sure. The Internet has reduced revenue from stamp sales and the USPS remains burdened with union contracts appropriate for another era. The post office has to acknowledge how the recession has changed its market and then restructure its business as the private sector has done.
When Congress gets back to work, the House should move quickly on the 21st Century Postal Service Act of 2012. With its debt burden reduced, the USPS can then create a plan to align itself with modern realities.