Hat in Hand, U.S. Postal Service Goes to Congress

(September 6, 2011) – A beleaguered United States Postal Service (USPS) is asking Congress to loosen benefits-funding rules in order to save itself from a potential bankruptcy.

In a Senate hearing Tuesday, Postmaster General and USPS CEO Patrick Donahoe laid out his version of the dire straits the Postal Service faces. “We are at a critical juncture,” he said in his testimony before the Homeland Security and Governmental Affairs Committee. “Action from Congress is sorely needed by the close of this fiscal year.” He predicts the USPS will lose somewhere near $10 billion next year alone, which would, among other things, mean it could not commit capital to its employee health-benefit fund.

Donahoe is asking Congress to allow him to break existing union contracts and reduce its workforce by up to 220,000 workers by 2015, as well as allow the USPS to skip payments for future retiree benefits. The financial pressure is exacerbated by contracts with USPS’ two largest unions expiring in November.

While Congress considers acting, they have President Barack Obama’s previous proposals to consider as well. In a February budget, Obama proposed delaying a large portion of a $5.5 billion payment – mandated by Congress – in order to keep the USPS afloat.