NPF: USPS financial situation drives morning panel

The USPS’ financial situation dominated a discussion with Marie Therese Dominguez, VP, government relations and public policy, USPS, and Patrick Donahoe, USPS deputy postmaster general and COO, this morning at the National Postal Forum.

Retiree health benefits, mentioned in Monday’s opening session, were a main focus of the talk. Under the payment schedule enacted by the Postal Accountability and Enhancement Act of 2006, the Postal Service is required to pay $5.4 to $5.8 billion dollars annually, from 2007 – 2016, and it also must pay health benefit premiums of $2.0 to $4.2 billion dollars annually between now and 2016. Given today’s economy and the USPS’ falling volumes and revenues, the agency maintain this schedule is now untenable for the organization.

“We are working on legislation around retiree health benefits,” Dominguez said at the opening of the session. “It’s our number one legislative priority. There’s no other industry that is required to make this aggressive pre-funding obligation.”

Proposed legislation, H.R. 22, would allow the USPS to pay its share of contributions for retiree health benefits, estimated to be $2 billion this year, out of the Postal Service Retiree Health Benefits Fund instead of its own pocket. The bill has been sitting in the House Subcommittee on Federal Workforce, Post Office, and the District of Columbia. It was scheduled to be marked up at a committee meeting Wednesday but was postponed until further notice.

Donahoe then went on to describe other ways in which the USPS is working to stay within its budget — including the massive job cuts that have taken place over the past few years. Any cuts are tricky, he noted, because the organization does not want to deplete service.

“Right now, I would put us up against any company in terms of service,” he said,” but we don’t want to make any additional cuts that would disrupt service because that’s our franchise.”

The panel also discussed the proposal of a five-day delivery week, which would be intended to counteract the drop in mail volume. In 2000, the USPS delivered an average of six pieces to each house per day, but, by 2020, it projects that number will drop to four pieces per house. Donahoe said it is possible that, after the shift, post offices would remain open on weekends and may even deliver packages. He said that the USPS is seeking more input from clients before it makes any decisions.

“The bottom line is to really look at how to maintain a high level of service and our retail presence,” Dominguez said.

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