For Immediate Release April 18, 2012

Contact:  Leslie K. Paige 202-467-5334 Luke Gelber 202-467-5318

CCAGW Denounces Senate for “Mailing in” USPS Bailout

(Washington, D.C.) – Today, the Council for Citizens Against Government Waste slammed S. 1789, the 21st Century Postal Service Act, for delaying crucial United States Postal Service (USPS) reforms, including the closure of 3,700 post offices and 250 mail processing facilities, as well as ending six-day mail delivery.

The bill, which was altered before it reached the Senate floor, would reduce the number of possible processing facility closures from 252 to 125, add several complex requirements to the process for post office closings, and require USPS to wait two years before stopping Saturday mail delivery. In addition, the Postal Service would receive an $11 billion cash infusion drawn from “overpayments” made in previous years to a retirement fund.

These band-aids will not stop the massive flow of red ink at USPS, which lost $8.5 billion in fiscal year (FY) 2010 and $5.1 billion in FY 2011. The 2011 loss would have been dramatically larger if Congress had not postponed $5.5 billion in scheduled payments to prefund USPS’s retiree health benefits. An April 12, 2010 Government Accountability Office report stated that the USPS business model “is not viable due to USPS’s inability to reduce costs sufficiently in response to continuing mail volume and revenue declines.” Decreased demand has resulted in dwindling incomes; first class mail, which makes up more than half of USPS revenue, peaked in 2006, and fell 20 percent over the next four years. On April 22, 2010, former Postmaster General (PmG) John Potter announced that the USPS will lose $238 billion over the next 10 years. In today’s Portland Daily Sun, S. 1789 co-sponsor Sen. Susan Collins (R-Maine) acknowledged that the Postal Service “is in danger of dying.”

“The legislation that the Senate will consider today flies in the face of the massive fiscal crisis at the USPS,” said CAGW President Tom Schatz. “As people increasingly communicate and pay bills electronically, the agency’s role has diminished. As a result, the size and scope of USPS must shrink. Postponing the termination of Saturday delivery and the shutdown of extraneous postal facilities, both of which would save the Postal Service billions, will doom the agency to bankruptcy.”

In a November 21, 2011 speech before the National Press Club, PmG Patrick Donahoe pointed out that “roughly 25,000 out of our 32,000 Post Offices operate at a loss.” He added that thousands of post offices have less than $20,000 in annual revenue yet cost more than $60,000 to operate, and many of these unprofitable locations are a few miles away from another post office. He bemoaned negative congressional response to even the slightest effort to close any post office, as well as interference in other proposals to address the USPS deficit.

“When the boat is sinking, no one stands around debating how to get rid of the water,” added Schatz. “Everyone grabs the biggest bucket on board and starts bailing. Instead, lawmakers are kicking the problem down the road, which will eventually deliver the bill to taxpayers to finance this rescue.”

The Council for Citizens Against Government Waste (CCAGW) is the lobbying arm of Citizens Against Government Waste, the nation’s largest nonpartisan, nonprofit organization dedicated to eliminating waste, fraud, abuse, and mismanagement in government.