USPS agrees to moratorium on post office closures

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USPS at work

The U.S. Postal Service (USPS), in response to a request made by multiple U.S. senators, agreed to a five-month moratorium on closures of post offices and mail processing facilities on Dec. 13.

Although the Postal Service had already begun shuttering some small post offices nationwide, Postal Regulatory Commission (PRC) chairman Ruth Goldway said that the moratorium won't have a significant impact on the USPS' bottom line. “We estimate that when they close a [small] post office, we're lucky if we're saving $20,000 a year,” she said. “It wouldn't add up to much money in the short term at all.”

Sen. Bernie Sanders (I-VT) authored a Dec. 9 letter signed by 22 senators calling for the moratorium. In a press conference, Sanders outlined the myriad issues with which the USPS is struggling and some potential solutions on which he hopes lawmakers can find common ground in the form of a bipartisan postal reform bill. 

Among his suggestions: authorizing the USPS to sell non-postal products as a way to raise additional revenue; revising a 30-year-old mandate that requires six-day delivery; and reevaluating another longstanding mandate that requires the USPS to prefund 75 years' worth of retiree benefits.

These are all suggestions that Goldway said she can support.

“I have advocated that the Postal Service have more flexibility to provide more non-postal products,” she said, giving by way of example the ability to issue various state licenses (it can already issue passports) and the ability to expand its financial services offerings beyond money orders and basic funds transfers.

She said that while the PRC is officially neutral on this, it has said that if the USPS expands into non-postal services, there should be some regulatory oversight. “I also agree with that,” she said.

Goldway said the issue of retiree benefits prefunding “is a concern I think everyone shares in the mailing community.” Current law requires the Postal Service to remit annual installments into a fund over the course of 10 years that will pay for 75 years' worth of benefits. Between 2007 and 2010, $21 billion was paid into the fund, Goldway said, which already held a nearly equivalent amount. She estimated that the fund currently holds half of the total required investment.

“We all agree the prefunding requirement is overly ambitious,” she said. “It most likely overstates the amount of money needed to establish such a fund, and no other government agency has to pay this. The funding mechanism should be at the very least adjusted.”

These proposals, along with the USPS' plans to eliminate Saturday delivery, would all require a change in federal law, but Goldway expressed optimism that such a change may come by the May 15 deadline. “The actions by the senators and the response from the postmaster general, I'm hoping, will energize legislative action,” she said. “The Postal Service has plans, but we can't act on them.”

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