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Hearing Hearing Date: April 17, 2013 9:30 am 2154 Rayburn House Office Build

Options to Bring the Postal Service Back from Insolvency

Options to Bring the Postal Service Back from Insolvency
April 17, 2013
9:30 am
2154 Rayburn House Office Build
Full Committee on Oversight and Accountability

Testimony from the GAO characterizes the Postal Service’s financial condition as “dire”.

What’s frustrating is that this is not a new revelation.  We have known for a very long time that the postal service was upside down and that without reform a taxpayer bailout is inevitable. More than 8 months ago the Postal Service defaulted on $11.1 billion in payments to meet its unfunded liability on retiree health care.

Bottom line, the postal service is broke. You would think given this sobering financial reality, senior management would be utilizing every tool available to cut costs and increase revenue.

Instead, little action has been taken. The Postal Service has developed this pattern of saying the right thing, but then delaying reforms, scaling them back or just scrapping them entirely.

Clearly, special interest lobbying and intense political pressure are dictating events rather than acting in the best interests of the American people.

Perhaps the clearest manifestation of this happened when, despite commitments I received to the contrary, the Postal Service bowed to political pressure and halted its plan to consolidate unused and under-used mail processing plants.

In July 2011, USPS said it needed less than half of the mail processing plants currently in use. Despite plant consolidation being fully within its own power, USPS has repeatedly delayed implementing its plan, and has pushed specific plant closure dates back to appease specific Senators.

The results of political pressure were also seen just last week when the Postal Service decided to abandon its plan to move to a modified delivery schedule that would have saved $2 billion per year.

In the Postmaster General’s testimony, he includes a legal analysis as justification for abandoning the plan, even though the legal analysis itself names other specific options USPS could pursue to move forward — options the Postal Service has so far ignored.

I don’t doubt or discount that Congress and the President have unfinished responsibilities and disagreement has delayed reform.  But in the absence of congressional action , it’s time for postal service management to exercise full use of its authority to do everything possible to avoid a taxpayer bailout. This is a time for action and decisiveness, not a time for excuses and empty rhetoric.

Witnesses and testimonies: The Honorable Mickey Barnett

Chairman, Board of Governors
United States Postal Service

The Honorable Gene Dodaro

Comptroller General
U.S. Government Accountability Office


Mr. Patrick Donahoe

Postmaster General & CEO
United States Postal Service Panel


Mr. Frederic Rolando

The National Association of Letter Carriers, AFL-CIO