Rep. Jason Chaffetz called the $5.5 million retirement package for outgoing Postmaster General John Potter absurd and unfair in the wake of the United States Postal Service’s announcement that it had lost $8.5 billion this year.
“That was ridiculous,” Chaffetz said in a phone interview with The Daily Caller. “It doesn’t seem fair to anybody.”
The congressman from Utah is the ranking Republican member on the Subcommittee on Federal Workforce, Postal Service, and District of Columbia. He has been working with California Rep. Darrell Issa, the ranking Republican member of the Oversight Committee, on “introducing a comprehensive postal reform bill,” he said.
Chaffetz called the USPS’s accounting of retirement funds “part of the reason that they’re so upside down financially.” He also cited the way in which the USPS does workers’ compensation as another issue.
“They have to pre-fund this at levels that others do not,” Chaffetz pointed out. As far as a solution goes, Chaffetz said, “We’re still trying to sort all that out,” saying that everything should “be on the board.”
The financial situation of the USPS is precarious, and the threat of a taxpayer bailout for the constitutionally mandated Postal Service looms.
“If things don’t change,” said Kurt Bardella, spokesperson for Issa, “there is the recognition that the USPS is not going to be shut down, which means there’s no alternative other than a taxpayer bailout, and that’s what we’re trying to avoid.”
Bardella said that the USPS needed to reduce operating costs, which amount to 80 percent of USPS expenditures, and said that a point of focus should be contracts with labor unions.
“Unions have balked at the idea of changing contacts, and refused the necessary layoffs that need to be made,” he said. “Even when we could retrain workers and put them in other areas of government, they’ve rejected that.”
Union negotiations are complicated for the Postal Service because labor contracts do not permit layoffs, and stalemates are resolved by a third party arbitrator who is not required to take the financial situation of the USPS into account.
Noting these difficulties, Chaffetz said the USPS “[needs] more latitude to deal with the realities of the economic condition of the post office.”
Chaffetz has a positive overall view of the Postal Service. “Most people would be surprised to learn that the postal service has actually been more financially responsible than just about every other government agency,” he told TheDC, saying that this was a pleasant discovery, since “I went in with great skepticism thinking they probably represented the worst of the worst.”
Nonetheless, he says, there are changes that must be made. “The postal service has got to figure out how to become more relevant,” he told TheDC. “They have capacity, but they’re not driving volume.”
“For me,” he added, “the question isn’t solely about cutting costs—believe me I’m all about cutting costs. But if at the same time they don’t figure out how to become more relevant,” he said, the problem will not be solved.
Chaffetz rejects some of the solutions that the USPS has suggested, such as increasing the price of postage and ending Saturday delivery. “Neither is going to help drive volume,” he said, “and that’s what they need to turn their balance sheet around.”
He suggested closing some post offices, especially in urban areas where multiple post offices close together become redundant. Conceding that members of Congress have often blocked closures of post offices in their districts, Chaffetz said that it was essential that Congress “look at the situation objectively and shed the politics.”
“There probably are going to be need some taxpayer funds needed,” he said. “Perhaps an early retirement program to get rid of some of the dead wood that is in the personnel.” Though such a proposal would cost taxpayers money in the short term, he said, it would ultimately cut costs and save money.