Postal Service Default Alarms Sen. Tom Carper

Posted July 30, 2012 at 6:33pm

The Postal Service will default this week on a $5.5 billion payment, but most lawmakers appear unconcerned — except for Sen. Tom Carper (D-Del.), who has been the lone voice warning about the dangers of Congressional inaction.

That’s because the Postal Service itself is making this an easy issue for Congress to ignore even as it faces a dire financial situation. The service’s website home page has no warnings about post office closings or delayed deliveries. To the contrary, an official statement issued Monday seems to downplay the severity of the problem.

“This action will have no material effect on the operations of the Postal Service. We will fully fund our operations, including our obligation to provide universal postal services to the American people,” the Postal Service said in a statement. “We will continue to deliver the mail, pay our employees and suppliers and meet our other financial obligations. Postal Service retirees and employees will also continue to receive their health benefits.”

In truth, the Postal Service will skip more than $11 billion in mandatory contributions for employee retirement programs between now and Sept. 30 in order to avoid dramatic service cuts. Nearly half of that amount is due to the Treasury on Aug. 1, the remainder at the end of the government’s fiscal year.

Carper tells anyone who cares to listen that the matter is more serious than the Postal Service wants to acknowledge.

“It doesn’t send the kind of signal that you want to send,” the Delaware Democrat said, referring to the default. “Businesses like certainty; they like predictability.”

Postmaster General Patrick Donahoe has to walk a tightrope for sure. On one hand, he needs to create an incentive for Congress to push through legislation to restore his agency to long-term solvency. On the other hand, he needs to prevent having current customers flee en masse to commercial services such as UPS and FedEx.

As recently as May, the Postal Service planned to shutter 3,700 post offices throughout the country.

Rural Senators decried the move in a deluge of letters and statements, channelling anger of constituents whose local post offices had been targeted for elimination.

Senators asked the Postal Service to delay shuttering post offices until the Senate passed Homeland Security and Governmental Affairs Chairman Joe Lieberman’s (I-Conn.) overhaul bill, which the chamber did in late April.

When it became clear the House would not bring a bill to the floor, the Postal Service went forward with a less aggressive plan that was less likely to drive business away.

Since the Senate bill’s passage, Lieberman has largely left Carper, who chairs the Homeland Security subcommittee with jurisdiction over the Postal Service, to lead the effort.

Carper has tweeted, given speeches and issued a steady diet of news releases to get people to pay attention to the service’s plight and to push the House, which has not passed an overhaul bill, into action. Carper said in an interview Monday he has talked with House leaders trying to convince them to bring a bill to the floor.

“Let’s just go to conference,” Carper said. “That’s the way we’re going to pass this bill.”

Carper called the House’s decision not to take up its version of the bill before the August recess “baffling.” He said that any measure that could lead to a conference committee would be acceptable at this point, even a partisan GOP bill that passes with only Republican votes.

The House legislation, sponsored by Oversight and Government Reform Chairman Darrell Issa (R-Calif.), would force more cuts at the Postal Service through a commission that would determine facility shutdowns. It would be similar to the unpopular, but successful, Base Realignment and Closure process used to pick military installations for shutdown.

That approach might prove necessary because few Members would ever want responsibility for closing down hometown post offices. Similarly, the issue of eliminating Saturday delivery has been thorny for Congress.

Asked about the matter Monday, a senior House GOP aide pointed to criticism of the Senate plan by the Postal Service’s board of governors. The governors say that the Senate-passed bill has no chance of providing for the amount of change that will be required to bring post offices back onto secure financial footing.

“Given volume losses we have experienced over the past five years along with expected future trends, it is totally inappropriate in these economic times to keep unneeded facilities open,” the governors said in their April statement. “There is simply not enough mail in our system today. It is also inappropriate to delay the implementation of five-day delivery when the vast majority of the American people support this change. Failure to act on these changes will ensure that the Postal Service’s losses will continue to mount.”

Asked Monday about that critique, Carper said he knew the Senate bill would not cure all of the Postal Service’s ills but criticized the House Republicans for having the nerve to “carp” about the Senate measure without passing an alternative.

“Give me a break,” Carper said.