USPS Seeks Bailout from Congress

Stamford, CT—Two rate increases earlier this year and a third to follow next year apparently aren’t enough for the U.S. Postal Service to offset the cost of combating terrorist threats and the declining revenue. On Oct. 23, President Bush authorized $175 million in emergency funds to the USPS. In addition, Postmaster General Jack Potter plans to ask Congress for more funding. But with House and Senate offices temporarily closed for sterilization following anthrax contamination, it’s unclear how soon Potter will be able to make his request.

Potter has yet to indicate how much more funding he’ll seek. In public comments earlier this week, he said that most, if not all, of the federal money would go toward the purchase of safety-related equipment. For instance, the USPS will obtain machinery that uses infrared rays and other technology to sanitize mail before postal workers and recipients handle it. (See related story, “USPS Takes Action.”) According to USPS estimates, higher security costs, increased anthrax inspection procedures, and the replacement of the New York post office that was destroyed when the World Trade Center was attacked on Sept. 11 will cost the agency at least $63 million.

Potter compared the USPS’s problems to those of the airline and insurance industries, both of which also have turned to the government for help following last month’s terrorist attacks. Unlike those industries, however, the Postal Service is a federal corporation, which according to the 1970 Postal Reorganization Act is supposed to pay for all its costs through postage it collects. The agency is allowed to borrow up to $15 billion from the U.S. Treasury; it already owes the Treasury $11 billion.

“Other businesses have gotten relief in the form of funding,” Potter said on NBC’s “Today” show on Oct. 22. “And we certainly think that while we are not necessarily a business, we’ll ask for help.” That same day, two Washington postal workers died from anthrax inhalation.

Gene Del Polito, president of the Arlington, VA-based Association for Postal Commerce, says that Potter’s request for congressional funding “is about time—what the hell? We’re not only talking about suffering losses from what is an act of war, but the USPS is also being asked to do all these extraordinary things for security purposes. It’s a cost that Congress should be prepared to pay, because the USPS isn’t going to get it from rate payers.”