US senators demand one-year ban on mail plant closures
Half of the US Senate has signed a letter calling on Congress to block efforts by the US Postal Service to continue downsizing its mail processing network. A letter signed by 50 senators called on Senate leaders to include a one-year ban on mail plant closures within finance legislation that must pass in order to keep the federal government running beyond 1st October.
Cash-strapped USPS announced at the end of June that it is to close 82 more mail processing plants from January 2015, having closed 141 facilities in 2012 and 2013 in order to reduce network operating costs.
The fresh wave of closures aims to save $750m a year and respond to the ongoing decline in US mail volumes, but will see more of the First-Class Mail service slowing from overnight to a 2-3 day service.
About 15,000 employees are expected to be affected by the closures.
The letter circulating the Senate was drafted by Senator Bernie Sanders, the Democrat-leaning independent from Vermont, along with Democrat senators Jon Tester and Tammy Baldwin.
It comes ahead of elections this November that will see 36 of the Senate’s 100 seats contested.
The letter, sent to the Senate Appropriations Committee’s chair and ranking member, respectively Sens. Barbara Mikulski and Richard Shelby, stated that a one-year moratorium on mail service cuts would give Congress the time it needs to pass reforms necessary for USPS to function “effectively into the future”.
“At a time when our middle class is disappearing, the loss of 15,000 good-paying Postal Service jobs will harm our local communities and economies,” the senators wrote. “Slowing down mail delivery even further will hurt senior citizens on fixed incomes, small businesses and the entire economy.”
Fiscal woes
The US Postal Service has made $45bn in cumulative losses since Congress last managed to pass postal reform legislation in 2006, including last year’s $5bn loss. USPS is facing liquidity problems because it is $15bn in debt, right at the legal maximum of its borrowing powers.
In the three months up to the end of June 2014, the federal agency lost $2bn, almost triple the losses made in the same period last year.
However, revenue has increased at the Postal Service, partly thanks to rate increases.
Senator Sanders said in a statement yesterday that there had been “misleading reports” about the Postal Service’s “supposed fiscal woes”, adding that USPS had taken in $1bn more in revenue than it spent since the fall of 2012.
“The rising revenues are partly due to an increase in package deliveries for online retailers. That growth has more than made up for fewer letters being mailed because of email and online bill paying,” the Senator’s statement suggested.
Frederic Rolando, the president of the National Association of Letter Carriers said of the latest quarter’s results at the Postal Service that letter revenue was growing thanks to an improving US economy, and package revenue was “skyrocketing”.
“The red ink at USPS is attributable to non-mail factors,” he said. “Chiefly the 2006 congressional mandate that the Postal Service pre-fund future retiree health benefits, something no other public or private entity is required to do. That annual $5.6 billion annual charge accounts for most of the ‘losses.'”
Rolando said it would be “irresponsible” to degrade US mail services, and drive away mail, given the positive mail trends.
“Lawmakers need to preserve and strengthen the profitable postal networks—which are the future of the USPS as it increasingly delivers not just six but seven days a week—while fixing the pre-funding fiasco,” he said.
