CAGW Condemns Political Interference in USPS Closure Decisions

(Washington, D.C.) – Today, Citizens Against Government Waste slammed Congress for once again meddling in the United States Postal Service’s (USPS) management decisions and delaying the closures of 3,700 post offices and 250 mail processing facilities across the country.  USPS recorded losses of $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’ retiree health benefits.  Twenty Democratic senators co-signed a letter to the Senate leadership asking that the closures be delayed.  The letter reads, in part, “While we may have very different views on how to financially improve the postal service, we all believe that democratically elected members of the Senate and the House have the responsibility to make significant changes to the postal service.  Unfortunately, we are concerned that the postal service may preempt Congress on this matter by closing or consolidating nearly 3,700 mostly rural post offices, over 250 mail processing facilities, and eliminating overnight delivery for first class mail before postal reform legislation is enacted.”

“The senators’ letter is disingenuous and self-serving”, said CAGW President Tom Schatz.  “Members of Congress have sat on their hands for years on postal reform, fiddling while USPS finances were going down in flames.  On the eve of fiscal ruin, as the USPS is finally going forward with some reasonable reforms on its own, these 20 senators have again interfered in the management of the Postal Service’s operations.  Now, a costly bailout is not only more likely, it is inevitable.”   

An April 12, 2010 report by the Government Accountability Office 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.  With more than 600,000 employees, the USPS ranks as the second-largest employer in America, trailing only Wal-Mart.  On April 22, 2010, former PMG John Potter announced that the USPS will lose $238 billion over the next 10 years.

In a November 21, 2011 speech before the National Press Club, Postmaster General 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 the response to even the slightest effort to close any Post Office, as well as interference in other proposals to address the USPS deficit. 

“In demanding another delay, Congress has revealed a stunning degree of self-interest,” said CAGW President Tom Schatz.  “Even though members claim that they want the USPS to operate like a business, they have again stood up for special interests instead of taxpayers.  These 20 senators and other members of Congress who for years have resisted reasonable efforts to close duplicative, underperforming postal facilities and stymied other reforms, should be held accountable for the financial disarray it will certainly bring,” concluded Schatz. 

Citizens Against Government Waste is a nonpartisan, nonprofit organization dedicated to eliminating waste, fraud, mismanagement and abuse in government.