USPS May Get Some Bailout Money But Not All of It

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Postmaster general John E. Potter will be back before a Senate panel tomorrow with a final figure for the cost to sanitize the nation's mail through June.


Meanwhile, Potter has said that if the U.S. Postal Service doesn't get the money it's requesting he may have to raise rates by as much as 15 percent. That increase could be in addition to the rate case announced a few weeks ago.


The Senate appropriations subcommittee had asked Potter for more information at a hearing last week in which he sought federal support because of the costs associated with the Sept. 11 terrorist attacks, anthrax crisis and other security threats. Potter put the total cost at $5 billion: $3 billion in direct costs for sanitization equipment and $2 billion for the adverse impact on the postal service's shrinking revenue and decreased volume.


"Users of the mail should not be burdened with these extra costs through the price of postage," Potter said at the hearing. "This could quickly threaten the foundation of a universal postal system serving all Americans."


Originally, the USPS expected a $1.35 billion deficit for the 2002 fiscal year, but the terrorist crisis has pushed that to $1.8 billion, chief financial officer Richard Strasser said last week.


Mindful of a presidential veto, the Senate panel indicated that the most it could offer the agency in the short term is $1 billion to help pay for irradiation equipment. Insiders said they don't see any more money coming very soon. Shortly after Sept. 11, Congress approved $40 billion for homeland security, and President Bush has already given $175 million to the postal service. Last week, Bush said he would veto any amount beyond the $40 billion.


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