House remains firm after USPS Q2 losses
June 5, 2012
By Tonda F. Rush
CEO | NNA
WASHINGTON—Steady financial losses by the U.S. Postal Service in its second fiscal quarter failed to move the House of Representatives to prompt action on postal reform.
USPS reported a $3.2 billion loss from January-March 2012, with most of the loss driven by federally-mandated payments to the U.S. Treasury for prefunding retiree health benefits and paying workers compensation costs. Both categories of employee benefits are targeted for reform in the postal reform legislation passed by the U.S. Senate in a bill sponsored by Sens. Joe Lieberman, I-CT, and Susan Collins, R-ME.
Passage of Lieberman-Collins, S. 1789, by the Senate by a three-vote margin temporarily accelerated legislative momentum to tackle USPS’ major structural problems. S. 1789 provides for a recalculation of the prepayments to lower the USPS burden. It also limits the workers’ compensation benefit for individuals who continue to draw benefits even after retirement, at which point they are unlikely to plan a return to the job. Important provisions for National Newspaper Association also are in the bill, including the preservation of overnight mail standards for local Periodicals Mail and of six-day mail delivery. New requirements for post office closings and a better process to manage mail processing plant closings are also in the bill. It mandates meaningful access to business mail entry points for newspaper mailers.
But the House leadership has made no move to take up S. 1789. Rep. Darrell Issa, R-CA, chair of the Oversight and Government Reform Committee, favors his own bill, which would put USPS under a politically appointed control board and hand off decisions about plant closings to a separate political board. Issa’s bill has failed to reach the House floor for nearly a year. Issa’s staff has hinted that a House debate may occur in July, but there has been no indication provided by House Speaker Rep. John Boehner on whether S. 1789 or the Issa bill will be considered. Both bills are expected to face heavy demand for amendments.
The possibility that political decisions by House leadership to delay postal reform until after the election in order to roll the dice on a Republican capture of the House, the Senate and the White House has been raised within mailing organizations that support reform. As Congress begins to wind down for the 2012 presidential and congressional campaigns, legislative time after July 1 is limited. Yet USPS’ fiscal year ends Sept 30, 2012, and a heavy $11 billion payment for the health benefits falls due for the current fiscal year and the 2011 payment that was not paid last October. The postmaster general has already signaled that USPS does not have the money to make the payments. The Issa bill would consider that default a triggering mechanism to set up action by the control board.
In 2011, USPS said it would run out of cash in the summer of 2012. Despite continued financial bleeding, it has pulled back from setting a date to run out of money. The postmaster general has said in public statements that he will not telegraph such a date out of fear of driving away business mailers.
NNA Postal Committee Chair Max Heath said NNA prefers working with S. 1789 in the House.
“Whatever the House does will not completely match the Senate bill. The legislation will need to be resolved in a conference committee. Time is running out. Newspapers need some certainty that our service will be preserved. We are urging our members to impress upon their House members during the election season that service is the highest priority and that sound financial decisions must be made in Congress to make sure service continues, particularly in our small towns and rural areas,” he said.