Top U.S. Postal Service officials are increasing pressure on Congress to deliver legislation to overhaul the agency, saying that recent improvements in its bottom line will fade away over the coming year.
Postmaster General Patrick Donahoe and other agency officials on Friday called the Postal Service’s last quarter its best in six years, and the fiscal 2014 performance the best in recent memory — even as USPS racked up $5.5 billion in losses.
But the postal brass insisted that, for a number of reasons, a four-year trend of fiscal improvements will taper off in fiscal 2015.
For starters, Donahoe and Joseph Corbett, USPS’s chief financial officer, said the continuing improvements in the Postal Service’s packaging business can’t offset the decline in volume for first-class mail, which remains their most popular service.
“We start in a hole every year because of the loss of first-class mail volume,” Donahoe, who also announced his retirement on Friday, told reporters on a conference call.
On top of that, postal officials pointed out that a temporary increase in stamp prices, which went into effect in late January, was scheduled to expire in 2015. Even so, Corbett argued that the boost the Postal Service got from the three-cent increase in stamp prices was felt in 2014, and wouldn’t give the agency much of a lift in the current fiscal year.
More broadly, postal officials insisted that they’ve essentially maximized what they can do to trim the agency’s employee rolls without assistance from Congress. The agency reduced its work hours by some three million in the last fiscal year, and now has fewer than a half million employees – some 220,000 fewer than just a decade ago.
“We’re simply running out of game-changing efficiency measures,” Corbett told reporters.
Lawmakers have said they’ll continue to negotiate for a potential postal reform deal in the current lame-duck session. But a deal is considered unlikely, meaning that Megan Brennan — who will become the first woman postmaster general when she replaces Donahoe next year — will have to take the lead in urging Congress to enact legislation.
The problem for Brennan is that the response to both Donahoe’s retirement and the agency’s $5.5 billion loss in fiscal 2014 underscored how divided lawmakers and outside advocates are on how to best revamp the Postal Service for the long haul.
Donahoe, for instance, has long pushed to end Saturday letter delivery, an idea unpopular among most Democrats and dozens of Republicans on Capitol Hill.
The postmaster general said the best legislation for the Postal Service would be a measure from the leaders of the Senate Homeland Security Committee, Tom Carper (D-Del.) and Tom Coburn (R-Okla.), that would open the door to five-day letter delivery and only temporarily delay the agency from further consolidating mail processing centers.
But Donahoe is also cool on efforts from labor and the business mailing industry to craft narrower legislation to assist the Postal Service.
Postal unions are seeking to stop USPS from shuttering processing centers early next year, and removing an annual required prepayment for future retiree healthcare official say is key to stabilizing the agency’s long-term fiscal health.
The Postal Service said Friday that it had some $6.9 billion in losses that were beyond its control, including $5.7 billion from a default on the healthcare payment. That led union officials to argue that the agency made a $1.4 billion profit last year.
“We hope that in addition to a new name, this change also involves a vision for the future that will enable the Postal Service to continue to adapt and to serve Americans and their businesses,” Fredric Rolando, the president of the National Association of Letter Carriers, said about Brennan replacing Donahoe.
Postal unions have pointed to an increase in the Postal Service’s packaging business to argue that the Internet — long blamed for the decline in first-class mail volume — doesn’t spell doom for the troubled agency. The post office has benefitted from the growth of online shopping.
For his part, House Oversight Chairman Darrell Issa (R-Calif.) blamed outside forces like the unions for blocking Donahoe’s efforts at helping Congress pass legislation.
“The next PMG [postmaster general] will have the opportunity to continue [to] fight for postal reform with an environment that is more receptive to commonsense solutions that benefit all Americans, and less beholden to the special interests that stymied Pat’s efforts to secure the future of USPS,” Issa said in a statement.
For others, like Rep. Gerry Connolly (D-Va.), Donahoe’s departure itself could improve the chances for legislation next year.
“I think he had a really disastrous tenure any way you look at it,” Connolly told The Hill.