WASHINGTON (AP) — The Senate offered a lifeline to the nearly bankrupt U.S.
Postal Service on Wednesday, voting to give the struggling agency an $11
billion cash infusion while delaying controversial decisions on closing post
offices and ending Saturday delivery.
By a 62-37 vote, senators approved a measure which had divided mostly along
rural-urban lines. Over the past several weeks, the bill was modified more
than a dozen times, adding new restrictions on closings and cuts to service
that rural-state senators said would hurt their communities the most.
The issue now goes to the House, which has yet to consider a separate
version of the bill.
“The Postal Service is an iconic American institution that still delivers
500 million pieces of mail a day and sustains 8 million jobs,” said Sen. Joe
Lieberman, I-Conn., a bill co-sponsor. “This legislation will change the
USPS so it can stay alive throughout the 21st century.”
The mail agency, however, criticized the measure, saying it fell far short
in stemming financial losses. Postmaster General Patrick Donahoe said if the
bill became law, he would have to return to Congress in a few years to get
“It is totally inappropriate in these economic times to keep unneeded
facilities open. There is simply not enough mail in our system today,” the
Postal Service’s board of governors said in a statement. “It is also
inappropriate to delay the implementation of five-day delivery.”
The Senate bill would halt the immediate closing of up to 252
mail-processing centers and 3,700 post offices, part of a postal
cost-cutting plan to save some $6.5 billion a year. Donahoe previously said
he would begin making cuts after May 15 if Congress didn’t act, warning that
the agency could run out of money this fall.
The measure would save about half the mail processing centers the Postal
Service wants to close, from 252 to 125, allowing more areas to maintain
overnight first-class mail delivery for at least three more years.
It also would bar any shutdowns before the November elections, protect rural
post offices for at least a year, give affected communities new avenues to
appeal closing decisions and forbid cuts to Saturday delivery for two years.
At the same time, the Postal Service would get an infusion of roughly $11
billion, basically a refund of overpayments made in previous years to a
federal retirement fund. That would give it immediate liquidity to pay down
debt to forestall bankruptcy and finance buyouts to 100,000 postal
The agency could make smaller annual payments into a future retiree health
benefits account, gain flexibility in trimming worker compensation benefits
and find additional ways to raise postal revenue under a new chief
Other bill provisions would:
—Place a one-year moratorium on closing rural post offices and then require
the mail agency to take rural issues into special consideration. Post
offices generally would be protected from closure if the closest mail
facility was more than 10 miles away. The exception would be cases in which
there was no significant community opposition.
—Shut five of the seven post offices on the Capitol grounds.
—Take into account the impact on small businesses before closing mail
—Cap postal executive pay through 2015 at $199,000, the same level as a
Cabinet secretary, and create a system under which the top people at the
Postal Service are paid based on performance.
The Senate bill faces an uncertain future. The House version, approved in
committee last year, would create a national commission with the power to
scrap no-layoff clauses in employee contracts and make other wide-ranging
“This of course kicks the can down the road,” complained Sen. John McCain,
R-Ariz., who unsuccessfully pushed for a commission in the Senate bill. He
said the current proposal failed to address longer-term fixes and delayed
major decisions. “We’ll be on the floor in two years addressing this issue
again, because it is not a solution.”
Noting that more people every year are switching to the Internet to send
letters and pay bills, Donahoe called the Postal Service’s business model
“broken.” The agency has estimated that the Senate bill would only provide
it enough liquidity to continue operating for two years or three years.
At stake are more than 100,000 jobs, The agency, $12 billion in debt, says
it could run out of money for day-to-day operations as soon as this fall,
forcing it to shut down some of its services. The mail agency forecasts a
record $14.1 billion loss by the end of this year; without changes, it says
annual losses will exceed $21 billion by 2016.
On Tuesday, the Postal Service circulated a smaller list of mail processing
centers that probably would close under the Senate bill; many in more rural
or small states would be spared. For instance, centers would survive in
Connecticut, Delaware, Maine, Missouri and Vermont, whose senators were
sponsors of the postal bill or pushed amendments, according to the
preliminary list obtained by The Associated Press. A facility in Easton,
Md., also would stay open. Sen. Barbara Mikulski, D-Md., previously
attempted to block the postal bill in protest of that specific closure.
Also surviving were all four mail processing centers in Nevada, home to
Senate Majority Leader Harry Reid, as well as all eight centers in Colorado
and all five centers in Utah.
“This bill is a vital first step in pulling the Postal Service back from the
edge of a fiscal abyss,” said Art Sackler, coordinator of the Coalition for
a 21st Century Postal Service, a group representing the private sector
“It’s now critical that the House follow suit quickly or we risk a shutdown
of the Postal Service and an ensuing economic calamity,” he said.
The Postal Service, an independent agency of government, does not receive
taxpayer money for its operations but is subject to congressional control.