Postal system’s financial woes spark debate in Maine

Posted Feb. 02, 2012, at 6:52 p.m.
Last modified Feb. 02, 2012, at 7:12 p.m.

ELLSWORTH, Maine — With 30 rural Maine post offices facing potential closure and nationwide service cutbacks looming, some local postal service employees and activists are attempting to ratchet up pressure on Congress to rescind a law they insist is causing the agency’s financial woes.

But at least one member of Maine’s congressional delegation said the U.S. Postal Service will need systemic changes to survive.

The U.S. Postal Service posted a loss of $5.1 billion in 2011 as the sagging economy, email and online bill paying continued to eat into the service’s finances. In response, postal officials have proposed closing 3,600 post offices, eliminating six-days-per-week mail delivery and potentially laying off 100,000 or more postal employees. The postal service also has proposed closing the mail processing and distribution facility in Hampden, affecting 183 jobs.

Not everyone believes such drastic steps are needed to restore the postal service’s financial footing, however. Organizers of a forum held Wednesday evening in Ellsworth said Congress can take a big step toward fixing the problem by overturning a 2006 law that is costing the postal service more than $5 billion a year.

“Congress created the problem and Congress can fix it just as easily as they created it without costing taxpayers a dime,” John Curtis, a recently retired postal service employee from Ellsworth, told about 50 people gathered in City Hall for the event co-organized by Occupy Ellsworth.

The law in question requires the postal service to spend more than $5 billion a year to “prefund” the service’s health care program for retired employees for the next 75 years.

Echoing claims made by the National Association of Letter Carriers union, Curtis and other speakers accused the Republican-controlled Congress in 2006 of imposing requirements on the postal service that no other government agency faces.

Curtis and other speakers predicted the proposed cuts will have a dramatic impact on businesses that depend on timely mail delivery and will only drive more people away from the postal service to private carriers such as UPS and FedEx. The result, they warned, could be the eventual demise of government-run postal services.

Bill Reeve, who estimated that he has used the U.S. Postal Service to mail between 2,000 and 3,000 used or rare books for his business, said private companies couldn’t fill the gap.

“They do a fine job at what they do,” said Reeve. “But they don’t deliver mail to remote areas of the country, and we have a lot of remote areas here in Maine.”

The postal service has put on hold its plans to close 3,600 post offices — including 30 here in Maine — while Congress attempts to come up with its own solutions to the problem. Several bills would address the pre-funding issue to varying extents.

Sen. Susan Collins, R-Maine, is co-sponsoring a bill that would reduce the amount of prefunding by essentially spreading the payments out over additional years. The legislation, Senate Bill 1789, also would allow the postal service to reclaim $11 billion in overpayments to the federal pension system and use that money to offer employees buyouts and early retirement incentives.

The goal of that provision is to save the postal service an estimated $8 billion a year by cutting 100,000 positions, or roughly 20 percent of the total staff. But the bill also directs the postal service to explore ways to shift toward more curbside mail delivery rather than hand delivery to people’s doorsteps.

Those provisions do not sit well with postal employee unions.

But Collins, who also was a co-sponsor of the 2006 prefunding bill, said doing nothing could result in mail delivery stopping this summer because of lack of funding. Such a scenario would jeopardize a service that supports 8.7 million Americans working in mailing or mail-related industries — including 38,000 Maine workers.

“The funding of the liability for future retiree health benefits is not the reason why the Postal Service is in a financial crisis,” Collins said in a statement on Thursday. “It would still have lost billions of dollars over the last three years, even if there were no funding requirement for these future retiree health benefits.

“The Postal Service still owes $48.5 billion to cover the costs of the promises it has made to provide health care to future retirees,” Collins continued. “If the Postal Service doesn’t cover these costs, the American taxpayer could be stuck with the bill in the not-too-distant future. That liability is not going away; it has been earned by postal workers.”

Organizers of Wednesday’s forum in Ellsworth as well as the National Association of Letter Carriers, meanwhile, are urging the public to pressure House members to support another bill.

The legislation, HR 1351, would temporarily address the prefunding issue by allowing the postal service to pay off current obligations using surplus payments to the federal pension system. The bill has 228 co-sponsors, including both Maine House members, Democratic Reps. Mike Michaud and Chellie Pingree.

That bill is stalled in Congress, however, while the House considers another bill that does not address the prefunding issue but is sponsored by the chairman of the committee that oversees the postal service.

Chris Winstead, who works in Michaud’s Bangor office, urged those present on Wednesday to “let your voices be heard” by contacting both of Maine’s senators and the House committee chairman, Rep. Darrell Issa, R-California.

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