US lawmakers offer no clear signals over USPS rescue plan

US House Republicans insisted last night they are continuing to work on postal reform proposals, but did not given any assurances that the postal bill would be debated next week, ahead of the summer recess. The Minority Whip in the House of Representatives, Steny Hoyer, pressed Majority Leader Eric Cantor to say whether the Senate Bill passed in April might be debated on the House floor, having already passed out of committee nine months ago.

Hoyer, the Democrat from Maryland, said the US Postal Service was facing “real stress” and noted that it could default on its payments to the federal government very soon.

But Cantor (pictured right) said firmly that the Senate Bill – the 21st Century Postal Service Act, which was passed by the Senate on a bipartisan vote – did not enjoy majority support in the Republican-controlled House.

Commenting on the USPS defaulting on its payments to the federal government, which could come as soon as next Wednesday, Cantor said: “We are continuing to work with [Oversight Committee] Chairman Issa to ensure that there isn’t an incident of default on the part of the Postal Office.”

“I think that the Postal Service has indicated that there is no risk of that in the short term, and we’re going to continue to address that to ensure that that does not happen.”

Cantor had originally scheduled a debate on the House Postal Bill, H.R. 2309, for some time between 4th July and the August recess, but the bill has since slipped off the agenda.

Default

Senator Tom Carper, who has been pushing the House Republicans to debate their postal bill ever since the Senate passed their version at the end of April, said today that if the Republicans do have a plan to prevent USPS from defaulting, they only have five days to put it into action.

Carper said USPS was currently on track to default on a major federal government payment on Wednesday, for the first time in its history. The payment, of $5.5bn, is for the Postal Service’s Congressional mandate to pre-fund future retiree healthcare liabilities.

The Democrat Senator from Delaware said: “Continuing to delay addressing the Postal Service’s woes is fiscally irresponsible. Should the House fail to pass a rescue plan before August 1, the Postal Service will be forced to default – further eroding confidence in its future and in Congress’ ability to provide it with the reforms it needs to save itself.”

Union

The American Postal Workers Union, which represents more than 220,000 USPS employees and retirees, said yesterday that it was the failure of Hose Republican leaders to act on needed postal reforms, in the nine months since their postal bill passed out of committee, that had pushed USPS to the brink of default.

The union also pointed the finger of blame towards Congress for setting up the $5.5bn annual payment obligation for USPS to pre-fund future healthcare liabilities.

APWU president Cliff Guffey said if USPS does default on its payment next week, there would be no immediate impact on mail delivery or employees’ pay.

But Guffey warned that the missed payment would provoke “misguided” editorials and demands for “drastic cutbacks and privatisation”.

Guffey said the “primary source” of the USPS financial crisis was the 2006 law from Congress requiring the Postal Service to pre-fund retiree health benefits 75 years into the future within a 10-year period.

“These payments – not the Internet and not losses from postal operations – are responsible for 82% of USPS red ink since the law was implemented, said the APWU president.

“The postal debacle is a manufactured crisis, and it is being exploited by those who want to privatise the Postal Service,” he said.