Lawmakers Working to Prevent USPS Bailout

Key lawmakers from both parties, and in both chambers, agree that the United States Postal Service needs to make some serious changes.

But the legislative prescriptions to bring stability to the USPS are not all on the same page on several crucial issues, including health care and retirement costs, a potential roadblock to bipartisan efforts to overhaul the struggling agency.

Rep. Darrell Issa (R-Calif.), the chairman of the House Oversight Committee, became the latest member of Congress to introduce legislation on the matter.

The California Republican says his legislation is aimed at preventing a taxpayer bailout of the Postal Service, which currently doesn’t use taxpayer dollars for operating costs.

Congressman Issa’s bill proposes to reduce the Standard mail nonprofit rate discount from the current 40% to 10%. This 40% discount would be reduced by 5% a year until it reaches 10%. That 5% reduction would be on top of annual CPI rate increases. The bill would also require a 5% rate increase above the CPI annually for classes such as Periodicals and Standard Mail flats that are below 90% cost coverage.

But Issa’s legislation does not touch what USPS says some of its major problems are: required pre-payments for retiree health insurance and overpayments into retirement programs.

Three other proposed legislative reforms – from Sen. Susan Collins (R-Maine); Sen. Tom Carper (D-Del.); and a measure backed by most House Democrats – deal more directly with USPS’ $5.5 billion health care payment and the billions of extra dollars the service says it has paid into the Civil Service Retirement System (CSRS) and Federal Employees Retirement System (FERS).

Issa says his bill, among other things, would save at least $6 billion annually by, among other things, creating a new commission to shed excess USPS facilities and a solvency authority to cut costs. While applauding certain parts of the legislation the USPS says it will also add too many extra layers of bureaucracy. The American Postal Workers Union (APWU) calls the bill a reckless attack on the Postal Service and the National Association of Letter Carriers (NALC) calls it misguided.

Source: The Hill

The US Postal Service is Broke!

If you need evidence that the federal government is officially running on empty, look no further than your local post office. Tweeter chatter has the USPS shutting its doors in July 2012 [Link]. The USPS, which delivers 563 million pieces of mail on a weekly basis, is “facing insolvency.” The USPS announced that it will need to suspend $115 million bi-weekly payments to its employee retirement accounts (85% of post-office workers) as of June 24th, in order to “conserve cash and preserve liquidity.” The stop on payments is expected to save the USPS over $800 million through the rest of this year, but according to people familiar with the agency the move may not be enough to deliver the mail service from financial desperation. One Washington insider says, “The USPS is hanging by a thread.”

Source: Wall Street Cheat Sheet

Catalogs Big Part of Mail: USPS Inspector General

Catalogs are a "hugely important part of the mail." That was the message from David C. Williams, U.S. Postal Service Inspector General, to attendees at the National Catalog Forum. The show was held in Washington June 21-22 by the American Catalog Mailers Association. During his session, "Ideas and Concepts in Defining the USPS in the 21st Century," Williams said that Standard Mail flats -- the category affecting most catalogers -- saw volume increases for the past five quarters. As far as helping the USPS cut expenses, Williams said the Postal Service network is "oversized." Williams also called for a better cost pricing structure.

Source: Multichannel Merchant