Postmaster General Asks Congress For Help

The U.S. Postal Service was established in the eighteenth century. And it is now trying to figure out how to survive in the twenty-first. The postmaster general took his dire case to a Senate committee Tuesday. He said if Congress doesn't act fast, the Postal Service won't be able to keep paying its bills. Robert Siegel talks to NPR's Tamara Keith.

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ROBERT SIEGEL, host: The U.S. Postal Service was established in the 18th century, and it's now trying to figure out how to survive in the 21st. The postmaster general took his dire case to a Senate committee today, and he said that if Congress does not act fast, the Postal Service will not be able to keep paying its bills. NPR congressional reporter Tamara Keith joins us now with more details. And, Tamara, what is the timeline for those bills that the Postal Service has to pay?

TAMARA KEITH: Well, there's a big bill that's coming due at the end of this month. A $5.5 billion payment is due at the end of this month to a retiree health plan that they have to pay into. The postmaster general, Patrick Donahoe, says he expects that the Postal Service will default on that because there's basically no way the Postal Service can pay it.

And then in October, the Postal Service owes another billion-plus for a workers' compensation payment. And if it makes that payment, he says that the Postal Service will only have enough money on hand to operate for a week. And after that, the cash flow situation will improve somewhat but only for a little while. Here's the postmaster.

PATRICK DONAHOE: But we think that by the August-September timeframe next year, given no action, we will be out of cash to pay employees and pay contractors.

KEITH: Or in other words, by the end of next summer, the Postal Service would be out of business if it doesn't get some help.

SIEGEL: Tamara, is it simply that email is killing the Postal Service? How did the post office get in such a dire condition?

KEITH: Well, absolutely, email and electronic communications are a big part of the problem. Just in the past five years, the volume of mail handled by the Postal Service has dropped 22 percent. You know, online bill pay is easier than ever. There are these e-vites that are much easier than putting a stamp on something, automatic deposits. Basically, first class mail is on the decline. It's going to continue to decline. They say their real hope going forward is in bulk mail, things like advertisements that come in the mail, and packages.

The other thing is that the Postal Service is burdened with accounting mechanisms and payments that it has to make for retiree health care and benefits and things like that that private businesses don't exactly face.

SIEGEL: Well, the postmaster general was on the Hill today asking Congress for help. What actually was he asking for?

KEITH: Well, to be clear, he was not asking for a bailout. He wasn't asking for a big infusion of cash from taxpayers. He was asking for controversial things, though. You know, he wants to move to five-day-a-week delivery. So Saturday delivery would be out. He wants to restructure its health care and pension system. He wants to be able to lay off as many as 120,000 more postal employees. Now, of course, the postal workers unions are not happy about that.

And members of the committee were not happy about the idea of eliminating Saturday delivery because they say it won't save enough and it takes away from the Postal Service's competitive edge. Senator Tom Carper is a Democrat from Delaware. He was one of several lawmakers on the committee who seemed to support the Postal Service in its need to do something. And he says that, basically, the Postal Service here is just asking for the ability to operate like a business.

Senator TOM CARPER: No business facing the kind of difficulty the Postal Service faces today would survive very long if it were told how many retail outlets they should have and where they should be located, yet that's what Congress does to the Postal Service.

KEITH: So that leaves the Postal Service coming to Congress begging for help.

SIEGEL: What's the next move for Congress here, or shall we just assume that this will be addressed sometime in the 11th hour after next summer?

KEITH: They're saying they don't want to do this in the 11th hour, but the postmaster general is not going to get what he wants, they say, which would be having this all settled by the end of this month before they start defaulting on their bills.

SIEGEL: OK, Tamara. Thanks.

KEITH: Thank you.

SIEGEL: That's NPR's Tamara Keith on Capitol Hill.

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