Senate Postal Bill Passes, Brings Mixed Reaction

Apr 26, 2012 11:08 PM  By

The U.S. Senate passed S. 1789 by a 62-37 vote yesterday, but the USPS said the bill, which is supposed to enable the U.S. Postal Service to return to financial viability, does nothing to help the agency.

Among other things, the bill will delay vital measures such as a move to 5-day mail delivery and the closure of as many as 3,700 post offices and 252 mail processing plants.

“Given volume losses we have experienced over the past five years along with expected future trends, it is totally inappropriate in these economic times to keep unneeded facilities open,” the USPS’s Board of Governors said in a statement. “There is simply not enough mail in our system today. It is also inappropriate to delay the implementation of 5-day delivery when the vast majority of the American people support this change.”

The financially-strapped USPS, which is forecast to lose a record $14.1 billion this year, agreed in December to a five-month moratorium on its plan to close as many as 3,700 post offices and more than 250 mail processing plants. The Senate bill further delays the closures and sets additional requirements for justifying them.

The USPS incurs a daily loss of $25 million and has a debt of more than $13 billion. If this bill were to become law, Postmaster General Patrick Donahoe said the USPS would be back before Congress within a few years requesting additional legislative reform.

The USPS has advanced a comprehensive five-year plan that would enable revenue generation and achieve cost reductions of $20 billion by 2015, which it said would restore it to long-term profitability.

“The plan we have advanced is a fair and responsible approach for our customers, our employees and the communities we serve,” Donahoe said in a statement. “We are hopeful that the legislative process will continue and that enacted legislation will put the Postal Service on a sustainable path to the future.”

Some industry experts view the Senate bill as a small step in right direction.

Joe Schick, director of postal affairs for printer Quad/Graphics, says the bill does nothing to hurt the mailing industry, but doesn’t fix the real problems of the USPS, either.

“Hopefully, more substantive language will get done in the Conference Committee if the House can ever pass a bill,” Schick said.

“The way I am looking at (S. 1789), it is at least something,” said Don Landis, vice president of postal affairs at Arandell Corp. “Does it go far enough? No, and I think the Senators know this bill, as they say, just kicks the can down the road, and we’ll be revisiting the same problem in a couple years.”

Jerry Cerasale, senior vice president of government affairs for The Direct Marketing Association, says the bill is a “good step” because it provides the USPS some room to right-size.

“It does delay changing delivery days, but does allow it if needed within two years,” Cerasale said. “When looking at legislation, we have to work for the doable. We cannot let the perfect be the enemy of the good. S. 1789 as amended is a good bill that helps lessen the financial woes of USPS.”

Hamilton Davison, president and executive director of the American Catalog Mailers Association, says the bill is an important step.

“We look forward to the debate moving over to the House and the ultimate passage of postal reform legislation that would reduce the uncertainty surrounding the USPS,” Davison said.

Since it’s a presidential election year, it remains unclear if the House would vote on the Senate bill during this calendar year.

Jim Tierney (jim.tierney@penton.com) is a senior writer for Multichannel Merchant. You can connect with him on Twitter (TierneyMCM) and LinkedIn, or call him at 203-358-4265.