Postal Service’s money problems continue after reprieve for Hampden plant

The U.S. Postal Service Eastern Maine Processing and Distribution Facility in Hampden, Maine.
The U.S. Postal Service Eastern Maine Processing and Distribution Facility in Hampden, Maine. Buy Photo
Posted May 17, 2012, at 8:30 p.m.
Last modified May 18, 2012, at 5:29 a.m.

HAMPDEN, Maine — While the United States Postal Service regional mail processing center and the 183 jobs associated with it will remain in Hampden for at least another 18½ months, the financial woes leading to a plan to close it remain.

With Postmaster General Tom Donahoe emphasizing that cuts in service and personnel still are necessary to decrease costs — and with competing bills still waiting to be brought to the floor, debated and voted on by the U.S. Congress — the continued full-capacity operation of the facility beyond February 2014 is not guaranteed.

“We simply do not have the mail volumes to justify the size and capacity of our current mail processing network,” Donahoe said in a press release Thursday afternoon. “To return to long-term profitability and financial stability while keeping mail affordable, we must match our network to the anticipated workload.”

While expressing their praise for Donahoe’s decision to delay the consolidation of the Eastern Maine Processing and Distribution Center in Hampden and 88 other facilities nationally, all members of Maine’s congressional delegation emphasized the nation’s mail service provider’s need for immediate financial relief.

“We feel like we’ve dodged a bullet, but the the Postal Service still needs reform,” said Willy Ritch, spokesman for 1st District U.S. Rep. Chellie Pingree. “Representative Pingree has said we need to get them out from under a [health and pension fund] prefunding requirement, but also feels there are things they [USPS] should be allowed to do to make them more competitive with other services.”

Both U.S. Sen. Susan Collins, who co-sponsored and helped write a postal reform bill that passed the Senate 62-37 two weeks ago, and Pingree specifically mentioned allowing the USPS to provide services such as printing and scanning, notary public and licensing — for example, fishing and hunting — which it now is prohibited from offering.

There is also another way to relax standards or rules and free the USPS to be more competitive, according to both Collins and Pingree.

“Federal Express and UPS are allowed to ship beer, wine and distilled spirits as long as it doesn’t violate state laws,” Collins said Thursday in a telephone interview. “In our bill we allow the Postal Service to do that as well. I think there are many creative ways to cut costs and increase revenue without cutting service.”

Collins went on to provide several examples, including revamping the 10-year, $55 billion prefunding Postal Accountability and Enhancement Act requirement the USPS is operating under, a plan to pare down the labor force, reduced business hours and further consolidation of administrative offices.

“The first reality is 80 percent of Postal Service costs are work force-related, and one provision of our bill that’s very important is refunding the overpayment of some $11 billion to the federal employees retirement fund that could then be used to pay down debt and reduce the size of the work force through severance packages, buyouts and voluntary early retirements,” Collins said. “Second, our bill stretches out the remaining contributions the Postal Service is required to make over 40 years instead of 10.”

While admitting that the prefunding requirement is a major financial hardship for the USPS, Collins said it isn’t the only or primary reason the Postal Service has lost money each of the last five years and is projecting a $14 billion net loss in 2012.

“We recognize the unfunded liability [for the health and pension fund] is very real — $46 billion as of today — but the USPS needs to keep paying on it, which it hasn’t the last two years because it hasn’t had the cash available,” said Collins. “That’s why that is actually not the main cause of its financial crisis, period.”

Collins backed up her assertion by pointing out that the USPS lost $13.6 billion over the last two years despite being given a congressional waiver and not making its prefunding payments for 2010 and 2011.

“We have also submitted a plan for the Postal Service to consolidate its administrative regional offices, which aren’t directly delivering consumer services,” said the Republican senator. “We also reformed the Federal Employees Workers Compensation Act to make it more comparable with in-state standards and give more assistance and incentives to get more people back to work quicker.”

Collins said a study found that more than 2,000 postal employees were over the age of 70 and getting workers’ compensation.

“The workers’ comp benefits were more generous than the retirement benefits,” said Collins, who added that many if not most of those workers were not likely returning to work because of their age, so it made more sense for them to take retirement packages.

The entire Maine delegation is hopeful that the Senate bill is brought to a vote before the House of Representatives soon, but Pingree and 2nd District U.S. Rep. Mike Michaud, both Democrats, said predicting when or if that would happen was nearly impossible.

“There is no plan right now. Congressional leaders put Mr. [Darrell] Issa’s bill on the calendar a few weeks ago, and then they took it off,” said Ritch. “Congresswoman Pingree certainly doesn’t support that bill, and has joined several of her colleagues to bring forward the Senate bill because she feels that’s the best alternative.”

Michaud released a statement Thursday afternoon concerning the postmaster general’s revised consolidation plan, which still will consolidate 48 facilities this summer.

“I am hopeful that House leadership will soon bring the bill recently passed by the Senate to the floor for consideration,” Michaud said. “While by no means perfect, the bill would provide the opportunity for the House to begin a discussion on how to build a strong postal service for the years to come.”

Republican U.S. Sen. Olympia Snowe also provided a statement while travelling back to Maine late Thursday afternoon.

“Moving forward, it is absolutely vital the House of Representatives pass comprehensive postal reform legislation and that a bicameral compromise be enacted into law as soon as possible enabling the USPS to pursue innovative cost-saving measures and develop new methods to raise revenues to become financially solvent,” Snowe said. “ I will continue to fight tooth and nail to ensure the communities throughout our state have timely and reliable access to mail services.”

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