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Senate nears passage of bill to slow postal cuts
Senate nears passage of bill to save Postal Service by slowing cuts, giving cash infusion
By The Associated Press

WASHINGTON (AP) ' A Senate bill aimed at saving the U.S. Postal Service would make it harder to close thousands of low-revenue post offices and end Saturday mail delivery ' steps the struggling agency says are needed to reduce billions in debt and become profitable again.

The measure takes steps to help the mail agency avert bankruptcy as early as this fall, giving it a cash infusion of $11 billion to pay off debt and reduce costs by offering retirement incentives to 100,000 employees. But the bill sidesteps most controversial decisions on postal closings, buying time for lawmakers who would rather avoid the wrath of constituencies in an election year.

The Senate was scheduled to vote as early as Wednesday on a final bill, after first considering amendments that in part could restrict the Postal Service from further cuts to first-class mail delivery. On Tuesday, senators agreed to tack on amendments that would bar the shuttering of rural post offices for a year, give afflicted communities new avenues of appeal and prevent any closings before the November elections.

The final bill was expected to pass the Senate but faces an uncertain future. The House has yet to begin consideration of a different version of a postal bill, which seeks to create a national commission that would make major decisions on postal cuts and make it easier to eliminate Saturday delivery. The commission, which would have authority to do away with no-layoff clauses in postal employee contracts, is fiercely opposed by postal unions.

"This of course kicks the can down the road," complained Sen. John McCain, R-Ariz., who unsuccessfully pushed for a commission in the Senate bill. He argued that the current bill failed to address longer-term fixes, instead hiding behind studies and reviews that unnecessarily delayed major decisions. "We'll be on the floor in two years addressing this issue again, because it is not a solution."

Postmaster General Patrick Donahoe also has criticized the Senate bill as a short-term answer. Noting that more people every year are switching to the Internet to send letters and pay bills, he has called the Postal Service's business model "broken." The agency has estimated that the Senate bill would only provide it enough liquidity to continue operating for two or three years.

At stake are more than 100,000 jobs, part of a postal cost-cutting plan to save some $6.5 billion a year by closing up to 252 mail-processing centers and 3,700 post offices. The mail agency, which is already $12 billion in debt, says it needs to begin closings this year. At the request of Congress, Donahoe agreed to delay closings until May 15 to give lawmakers time to pass legislation.

The Senate bill seeks to cut about half the number of mail processing centers the Postal Services currently wants to close ' from 252 to 125 ' allowing more U.S. areas to maintain overnight first-class mail delivery for at least three more years. Beyond the one-year moratorium on closing rural post offices, the Postal Service would be required to undergo additional layers of approval before closing any mail facility.

In the meantime, the Postal Service would get a cash infusion of roughly $11 billion, basically a refund of overpayments it made in previous years to a federal retirement fund; the agency could use the money to pay down debt and offer buyouts to 100,000 postal employees. It would be allowed to make smaller annual payments into a future retiree health benefits account, which currently amounts to more than $5 billion a year, get more flexibility to cut worker compensation benefits and be required to establish a chief innovation officer to find new ways to bring in postal revenue.

Under an amendment passed Tuesday, the Postal Service would be specifically barred from closing post offices for one year if they are located in rural areas ' those with fewer than 50,000 people. The exception would be if there was no significant community opposition.

After one year, the mail agency would have to take rural issues into special consideration, including economic impact, the quality of Internet broadband service and location. Post offices would generally be shielded from closing if the next closest mail facility was more than 10 miles away.

"Our post offices are the lifeblood for towns across our state and a source of good-paying jobs in areas hard-hit by the economic downturn," said Claire McCaskill, D-Mo., who co-sponsored the amendment. "This amendment protects rural post offices, with a realistic eye toward the future."

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