Postal Service debate: lay off 100,000 or stop Saturday delivery

Paula Duffy's picture

The U.S. Postal Service fiscal crisis is well documented. Congress is debating proposed legislation that would slash up to 100,000 jobs rather than cut back to five-day a week delivery.

The debate on how to save the U.S. Postal Service has reached the stage of drafting proposed bills to address its potential collapse from the weight of debt and falling revenues.

On Wednesday, a bi-partisan group of Senators put forward a plan to cut the workforce, close USPS offices and make attempts at reducing the current wage and benefits structure. reported that Sens. Lieberman (I-Conn.), Tom Carper (D-Del.), Susan Collins (R-Maine) and Scott Brown (R-Mass.) offered a plan under which cost-savings measures would be implemented and Saturday deliveries would be guaranteed.

The layoffs would first be sought through offering incentives to those that might want to take an early retirement or a package that would sustain them while they look for other employment.

To be able to give such incentives, the USPS would finally receive close to $7 billion it has long sought for its upfront payments related to future pension and other employee benefits obligations.

The U.S. Postmaster General Patrick Donahoe has cried about the unfairness of the USPS being asked to make such payments when it was singled out to do so. Read: Post Office wants pension reform to cut its debt.

Earlier this year Donahoe told Congress at a hearing on the Postal Service fiscal crisis that but for those prepayments the USPS would be operating in the black.He put the amount at $5.5 billion per year since 2007.

Once the USPS receives whatever sum is proposed in the legislation it will be able to use $2 billion of that amount to entice 100,000 people to leave their jobs, Senator Carper told Politico. If the incentives are successful it will result in up to $8 billion in savings for future employment related costs.

On the other side of the equation with a different approach to fixing the fiscal problems of the USPS is U.S. Representative Darrel Issa (R-CA). He would create an oversight board, shutter thousands of post offices and cut Saturday service, along with asking for significant changes to operation of the USPS. Read: Post Office closures target poor city neighborhoods

The Wall Street Journal reported last month that in Europe, countries had anticipated the slow-down in traditional mail usage and turned their post offices into revenue centers.

They offer "...everything from banking to fingerprinting, to the sale of jewelry, candy, and children's books. Not all ventures have panned out, but many of these posts are now profitable even as traditional mail declines."

Traditionally, the USPS has raised its revenue targets by hiking the price of postage. Yet another price increase is coming this January when a first class stamp will cost $.45.

Congress passed a temporary funding measure to keep the USPS afloat past a September 30, 2011 deadline that ended its current funding. Now into November, the legislation that is proposed will take some time to debate and bring to a vote. Read: Post Office fears default

In the meantime, tens of thousands of workers and many communities around the country worry about what a new streamlined USPS will look like.

Image credit: Wikimedia Commons

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