The Obama administration?s top personnel officer said Tuesday that the White House is a few weeks away from presenting a plan to save the U.S. Postal Service from insolvency.
Asked at a Senate hearing why the administration doesn?t have ?a concrete plan? for fixing the Postal Service?s mounting budget problems, U.S. Office of Personnel Management Director John Berry replied that one was forthcoming.
Continue Reading?There will be a plan,? he said. ?The White House will have that submitted with the deficit reduction package within the next few weeks.?
Berry was put on the spot by members of the Senate Homeland Security and Government Affairs Committee after Postmaster General Patrick Donahoe urged lawmakers to save his cash-strapped agency from insolvency.
Portraying USPS as the core of a mailing industry that employs more than 8 million Americans and is ?a major driver of the nation?s economic engine,? Donahue warned senators that his agency ?is on the brink of default? and could shut down sometime next summer if reforms aren?t enacted. By the end of the month, USPS will reach its legal borrowing limit and will be unable to make a $5.5 billion payment for retirees? health benefits, he said.
Among the cost-cutting measures Donahoe has already proposed: axing Saturday mail delivery, shuttering 3,700 post offices, laying off 120,000 workers and making changes to employees? health care and pension systems to cut costs.
?Our collective actions ? particularly those of the Postal Service and Congress ? to secure the future of the nation?s postal system will directly affect a significant portion on the American economy,? Donahoe said, according to prepared remarks before the Senate Homeland Security and Government Affairs Committee. ?Failure to act could be catastrophic.?
While the two parties have quarreled about how to repair USPS?s fiscal health, both committee Chairman Joe Lieberman (I-Conn.) and ranking member Susan Collins (R-Maine) agreed Congress must take emergency action to prevent the agency from defaulting on its debt.
?If nothing is done, the Postal Service will run out of money and be forced to severely slash service and employees,? Lieberman said. ?That is the last thing our struggling economy needs and the last thing our country needs.?
Collins called the Postal Service?s reform proposals ? which the agency says would save $20 billion and return it to fiscal solvency by 2015 ? ?a remarkable turnabout? from past plans. But both she and Sen. Tom Carper (D-Del.), who have introduced their own reform legislation, hit the Obama administration for failing to propose a serious plan to address the crisis.
?The proposals put forward by the administration to date have proven insufficient,? Carper said.
While email and the Internet have severely eaten into USPS?s business, the federal agency still delivers 563 million pieces of mail each day. It has more locations than Wal-Mart, Starbucks and McDonalds combined.
And if the USPS were a private company, its revenue would rank just behind Boeing Co. and exceed that of Home Depot and Target. Yet the agency could face up to a $10 billion deficit for the fiscal year ending Sept. 30.
Berry, whose office oversees health care and retirement funds for federal workers, said the administration has not taken a position on proposed changes to employee programs. His office has an obligation to avoid any negative impacts that might occur if postal workers withdrew from those federal programs, he said.
Donahoe said his agency could shut down as soon as next August or September and urged lawmakers to take action by the end of this month to avoid any disruptions in mail service.
?I?m operating right now with a week?s worth of cash for a $65 billion business,? Donahoe said.
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