WASHINGTON — The Senate passed a postal reform bill Wednesday aimed at stopping the U.S. Postal Service from hemorrhaging $25 million per day, but critics of the bill say it will actually make things worse.
Robert Cohen, a former Postal Regulatory Commission official, said the Senate bill would exacerbate the Postal Service’s financial problems.
“It’s not clear that they’ll be held to pay their debts,” Cohen told The Daily Caller. “As they accumulate more and more deficits and they borrow more and more money from the Treasury, in the end the taxpayer is likely to pick it up.”
The senators behind the effort disagree.
“We proved the Senate can confront a real problem, a real crisis, and work across party lines to come up with a way to fix it,” Connecticut independent Joe Lieberman said during a news conference immediately following the vote. He sponsored the bill with Republicans Susan Collins of Maine and Scott Brown of Massachusetts, and Democrat Tom Carper of Delaware.
The 21st Century Postal Reform Act would allow the Postal Service to end Saturday delivery in two years, shutter post offices and processing facilities — with some restrictions — and gain access to $11 billion it overpaid to a federal retirement fund, which it can use to pay workers to retire and to pay off its debts.
But the bill does not allow the drastic cuts the Postal Service is asking for, measures such as ending Saturday delivery immediately and closing “unneeded facilities.”
“If this bill were to become law, the Postal Service would be back before the Congress within a few years requesting additional legislative reform,” Postmaster General Patrick Donahoe said in a statement released after the vote.
The Postal Service says its own plan would save $20 billion by 2015. It is not clear how much the Senate plan would save.
Some say the real problem is the Postal Service’s relationship to the federal government. It is a quasi-private organization but Congress controls its purse strings.
“The first step is to remove some of the government control, which this bill does not do,” A. Lee Fritschler, a former chairman of the Postal Rate Commission, told TheDC.
“On the one hand, the Postal Service is supposed to operate like a business, but no business operates under the strict controls Congress has over the institution,” the George Mason University public policy professor said.
“So there’s a bit of duplicity in all this.”
Fritschler said freeing up the Postal Service would give it more freedom to focus on what it does well. That includes getting out of the long-distance delivery business and focusing on the last mile — the final stage of the delivery process when the mail actually reaches the consumer.
Instead, to keep current operations going, the Postal Service has been borrowing from the U.S. Treasury to cover its costs, racking up $13 billion in debt. Although it does not take any taxpayer money and covers its costs by selling stamps, products and services, former postal official Cohen says immediate and drastic cuts are necessary if it is to become financially sustainable.
The Senate bill will now move to the House of Representatives, where it would have to be reconciled with a related bill, sponsored by California Republican Rep. Darrell Issa, which calls for a more dramatic overhaul.
If Congress does not pass a postal reform law by May 15, thousands of post offices and processing centers will close — because, the Postal Service says, it will simply run out of money.