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USPS solvency saga continues

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Melissa Hoffmann, news editor, Direct Marketing News
Melissa Hoffmann, news editor, Direct Marketing News

The embattled U.S. Postal Service (USPS) is continuing its struggle to stay in the black, but the five-month moratorium on facilities closures may end more than a month before the Postal Regulatory Commission (PRC) releases an advisory opinion on its streamlining plans, said USPS spokeswoman Sue Brennan.  

The USPS filed a formal request this week with the PRC asking it to expedite its approval of plans to reduce the number of postal facilities by more than half and revise mail delivery service standards. The request is in response to the PRC's announcement that it will need until at least July 10 to release its opinion, Brennan said. Some lawmakers — including Sen. Susan Collins (R-Maine), a cosponsor of one of several postal reform bills on the table — have been vocal on the issue, saying that the Postal Service, without intervention, is likely to go belly-up by that time.

The USPS requested in its filing a decision by mid-April.

However, PRC chairman Ruth Goldway said the commission's decision to wait until July to issue an opinion is purely proper due process. She said the Administrative Procedures Act “requires certain levels of notice and time for review of testimony and the opportunity to cross-examine witnesses,” as well as the opportunity for each camp to offer rebuttals to testimony.

“It's a long process,” she said. “I myself pushed our staff very hard to find a way in which we could move this process forward quickly, and the staff presented to us what they thought was the minimum time necessary and fair, and that's what we issued. The USPS in the pre-hearing conference did not raise this April date. We're trying to do the best we can.”

Goldway explained that the USPS provided 13 witnesses with written testimony on the issue, and there are a host of other participants in the debate — among them various postal unions, the Greeting Cards Association and the Major Mailers Association. She said these participants must all legally be given the opportunity to read the testimonies, determine who to cross-examine, submit their own witnesses for examination by the Postal Service, and have the chance to offer rebuttals.

“The USPS, if [it] wants, can not rebut … and it would take a month out of the process,” Goldway said, adding that the issues facing the post office are of such complexity that a thorough review is necessary. “This is an important issue and we have to listen to all interested parties,” she said.  

Brennan said she doesn't know what will happen if the PRC fails to issue an advisory opinion by the end of the moratorium, but said the USPS is proceeding with every cost-saving aspect it's permitted to without waiting for the PRC or the moratorium to end. The moratorium only prevents physical closures of facilities.

“We're doing all the feasibility studies; we're reviewing everything,” she said. “There may be some uncertainty with the time frame, but we are moving forward.”

The five-month moratorium, announced in December, was intended to allow lawmakers time to find solutions to the problems plaguing the Postal Service and enact them through legislation. While several reform bills exist, none have made it through either house of Congress. However, that may soon change, as the House returned to work Jan. 17 and the Senate goes back to work on Monday.

Many possibilities have been bandied about in terms of revenue-raising, including 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.

The USPS' inspector general has said that the organization has overpaid its civil service pension requirements by about $75 billion since 1972.

The USPS also pays about $115 million every other week to the Office of Personnel Management to fund the Federal Employees Retirement System (FERS). Goldway said $7 billion has been overpaid into the FERS fund to date. “There is legislation that would give them that $7 billion back, some of which it could use for operating [costs] and retiree benefits,” she said.

“Those are the big accounting issues, and the federal government and Congress can take action on that one way or another,” she said. “We're going to do what we think is fair and responsible within the requirements of the law.”

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