US Post Office Faces More Painful Cuts

April 17, 2012 Updated: April 17, 2012

Losing billions year after year, the U.S. Postal Service has made significant cuts to staff, facilities, and service—with even more cutbacks expected in the coming months. But the challenge for the USPS is whether it can reach financial viability any other way.

Mail volume has fallen faster than expected, and experts project that this will only continue in a steady decline. In an effort to be more efficient, several mail processing facilities have closed since 2006. But according to the U.S. Government Accountability Office (GAO), there is still more fat to trim.

A new report says the USPS just doesn’t see enough business to justify all the processing capacity it currently uses. According to the GAO analysis, the post office could stand to lose nearly half of these facilities.

The news didn’t come as a surprise to Sen. Tom Carper (D-Del.), chairman of the subcommittee that oversees the U.S. Postal Service. He says that the GAO report merely confirms the sad truth that legislators have known for years: Even though the post office has done much to adjust operations, they are continuing to hemorrhage money.

With the post office showing little sign of improvement, lawmakers may soon adopt more drastic measures—several facilities will shut down, and Saturday delivery will be a thing of the past. Debates on comprehensive reform legislation are expected within the next few weeks.

According to Carper, many in Congress strongly believe that the proposal to close more than 200 additional mail processing facilities isn’t in the nation’s best interest. But when the Senate-led moratorium for postal closures ends next month, lawmakers will be faced with some tough choices.

“I’ve long maintained that if something is worth having, it is worth paying for,” said Carper in a statement. “If Congress wants to require the Postal Service to maintain additional mail processing facilities, we have to figure out a way to reduce costs elsewhere or raise revenues.”

One of the lawmakers looking for other solutions is Sen. Dick Durbin (D-Ill.). Durbin was one of 15 senators that pushed for the five-month closure moratorium, and he still believes the USPS simply can’t “cut its way” to a workable solution that does everything—protects jobs, reduces costs, and maintains service.

In a statement, Durbin called for the need to restructure postal services in a way that preserves its long-held reputation for affordable, timely service. With Senate Bill 1789, Durbin and others are hoping to expand USPS revenue opportunities, while still acknowledging the new reality of an Internet-driven world.

While the post office awaits legislative guidance, some suggest that the USPS’s most significant financial hurdles actually stem from Congress itself. Although the mail carrier doesn’t run on government money, it is still bound by congressional constraints and legal restrictions that prevent it from operating like a normal business.

More importantly, in 2006 lawmakers saddled the USPS with an enormous annual bill—prepaying 75 years worth of its employee health care benefits within a decade.

One thing is for sure: Unless lawmakers can come up with a solution by May 15, the USPS could see the end of more facilities and services. But despite such a grim scenario, there is still hope that the post office can pull through.

“As I’ve said time and again, the Postal Service’s financial crisis is dire, but it’s not hopeless,” said Carper. “We can solve this problem if we work together to provide the Postal Service with the flexibility and resources it needs to survive in the 21st century.”

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