Postmaster Patrick Donahoe and California Rep. Darrell Issa, R-Ca., shake hands after an oversight hearing on the future of the Postal Service.
(John Burfisher/MNS)
WASHINGTON (Marketwatch) — U.S Postmaster General Patrick Donahue, testifying before a House committee on Wednesday, said restrictive laws are at least partially to blame for his agency’s ability to keep pace with technological change – and be financially solvent.
The U.S. Postal Service, which lost $16 billion in the last fiscal year, shed about 25,000 jobs last year, but also has put the brakes on a plan to change home delivery of mail from six to five days a week.
The agency is “currently operating with a broken business model and the gap between revenues and costs will only get worse in the coming years unless the laws that govern the Postal Service are changed,” Donahue said.
But California Rep. Darrell Issa, the Republican who chairs the House Government and Oversight Committee, which called the hearing, said he was surprised that there was an about-face on Saturday mail delivery.
“The Postal Service has developed this pattern of saying the right thing, but then delaying reforms, scaling them back or just scrapping them entirely,” Issa said in prepared remarks.
“What is your end game to get out of this?” Issa asked Donahue, as he pressed the administrator for solutions.
The Postal Service wants to set up its own plan to cover the health-care costs of its workers, Donahue said, citing the financial benefits of moving away from the government plan.
And, Donahue said, that since 2006, the Postal Service has reduced its workforce by nearly 200,000 people. The agency also has consolidated 300 mail-processing facilities and eliminated 21,000 delivery routes.
“And yet, we have to go much further and much faster — and we are prepared to do so,” Donahue said.
“We are very supportive whatever size workforce it takes,” said Fredric Rolando, president of the National Association of Letter Carriers.
Rolando also said he believes if Congress helps the Postal Service with pre-funding and gives it what is needed to negotiate the healthcare changes, then they will be able to keep the job it needs.
Congress requires the agency to pre-fund its employee benefits by 75 years. That requirement has often been cited as a major cause of the Postal Service’s massive financial woes.
But Rep. Blake Farenthold, a Texas Republican, said he’s concerned the USPS has not put aside enough money for its retired employees.
“We believe pre-funding is a good thing as long as it’s done in a fiscally responsible way,” said Rolando.
Donahue asked Congress to fast-track a bill that would allow the Postal Service to update its broken business model. The agency has just nine days of operating cash on hand, he said.