The U.S. Postal Service must change, but the needs of customers must be the first consideration, the National Newspaper Association told the Senate Committee on Homeland Security and Governmental Affairs this month.
The need for a cost-efficient, customer-oriented Postal Service is compelling and urgent, National Newspaper Association Chief Executive Officer Tonda F. Rush told the committee.
“We share the views of many that the Postal Service has been unfairly burdened with the way payments into benefits systems have been structured,” Rush said. “We agree the mail-processing network carries a heavy cost of excess capacity. But the Postal Service’s solution cannot be to push mail out of the system.”
Postmaster General Patrick Donahoe has alerted Congress that the Postal Service will be in technical default this month when it fails to make a $5.5 billion payment into a trust fund for future retirees’ health benefits. It has already missed one payment of its employer matching funds into a federal retirement system.
He has predicted the Postal Service will run out of cash next summer unless Congress allows it to make sweeping changes.
Among them are to end Saturday mail delivery, renegotiate labor contracts and close many post offices and mail sorting facilities.
Rush said the changes are already affecting delivery of community newspapers that depend on mail delivery, citing examples of subscribers lost because mail is being trucked to distant cities for processing.
She said NNA does not oppose restructuring, provided customer needs are taken into account.
Timely newspaper delivery is part of a community’s needs as well, she said. She cited examples where NNA parts company with the Postal Service’s proposed solutions.
“Closing smaller, efficiently managed Sectional Center Facilities so larger metropolitan plants can be stacked up with mail for a 22-hour processing clock may make sense if the sole purpose is to eliminate jobs and run the machines longer, but if it causes diminished service standards and undependable service, this change will be an expense and not a savings,” she said.
She said NNA was not opposed to the closing of small post offices, but in offices where newspaper mail is entered it is not clear that the Postal Service is taking into account the beneficial revenue from publishers.
Instead it appears to be looking only at consumer purchases when deciding which offices produce too little revenue to remain open.
NNA also remains opposed to ending Saturday residential mail delivery.
“In addition to losing newspaper deliveries, we believe lost First-Class remittance mail will create cash flow disruptions for our newspapers and other small businesses,” she said. “We have made it clear that if the Postal Service will not deliver our newspapers on Saturdays, we need the help of Congress to make sure we can do it ourselves.”
NNA has called on policymakers to permit publishers to use mailboxes on Saturdays if residential delivery is ended.
A combination of business lost to the Internet and the nation’s economic problems has led to a 22 percent drop in mail with a revenue loss for the Postal Service of more than $10 billion over the past five years.
This year the Postal Service will run up an $8 billion deficit for the second year in a row.
The Postal Service also will bump up against its $15 billion credit line with the U.S. Treasury soon, which could force it to default on a $5.5 billion payment into the healthcare fund for its retirees scheduled for the end of this month.
Donahoe says the Postal Service would save $20 billion and return to solvency by 2015 if it eliminates Saturday delivery; closes approximately 3,700 post offices; shrinks its workforce by 220,000; pulls out of the federal employee healthcare plan and creates its own; does away with a defined benefit retirement plan for new employees, offering them instead a defined contribution plan; and requests the return of $6.9 billion in overpayments to the Federal Employee Retirement System.
