Postmaster General Pat Donahoe testifies before the Senate Homeland Security and Governmental Affairs Committee on Feb. 13. (Mike Morones / Federal Times)
The U.S. Postal Service may need an enormous taxpayer bailout if Congress stymies its bid to end Saturday mail delivery and make other changes to other operations and employee benefits, Postmaster General Pat Donahoe told a Senate panel Wednesday.
The agency “cannot continue on its current path,” Donahoe said at a hearing of the Senate Homeland Security and Governmental Affairs Committee. “Do the right thing. Be responsible.”
Donahoe quickly faced sharp questions from lawmakers worried about the impact on rural service and skeptical of the Postal Service’s authority to override a long-standing congressional ban on reducing delivery days.
“If we’re going to have mail delivery that’s going to work for urban areas, it damn well better work for rural America, too,” Sen. Jon Tester, D-Mont., said.
When asked by Sen. Mark Pryor, D-Ark., to explain the legal justification for five-day delivery, Donahoe did not answer directly, but said the Postal Service had given Pryor’s staff a nine-page opinion. A USPS spokesman later said that the agency would not make the document public.
Sen. Tom Coburn, R-Okla., the committee’s top Republican, praised Donahoe for taking the lead.
“There’s really 536 postmaster generals, unfortunately, and the goal of our reform ought be that there’s one,” Coburn said, in an apparent allusion to the sway that lawmakers and the president hold over the Postal Service.
Donahoe announced last week that Saturday mail delivery would end in early August, with expected savings of $2 billion a year. Package delivery would continue and post offices would remain open on Saturdays.
Already, the Postal Service owes the U.S. Treasury $15 billion and has defaulted on more than $11 billion in legally required payments into a health care fund for future retirees.
“If we delay reform another year, we may never get back to a sustainable [business] model,” Donahoe said, with the amount needed for a bailout swelling to more than $45 billion by 2017.
Besides ending Saturday mail delivery, the Postal Service also wants to create its own stand-alone employee health insurance plan, get more freedom to offer new products and services and keep new workers from joining the Federal Employees Retirement System. Instead, those new hires would be limited to a 401(k)-type option, such as the Thrift Savings Plan.
Endorsing Donahoe’s bleak view of USPS finances was Comptroller General Gene Dodaro, head of the Government Accountability Office.
“The Postal Service needs to act, and Congress needs to act,” he said.
Lawmakers, however, have been deadlocked over the terms of an overhaul. A Senate-passed bill died in the House last year. Because a new Congress took office last month, lawmakers must now start over.
After the hearing, committee Chairman Tom Carper, D-Del., said he hoped to introduce bipartisan legislation by next month and move quickly after that. If Congress is still debating five-day delivery and other issues in August, “we have failed,” Carper said. “And I have no intention of failing.”