Postal Service defaults, Congress does nothing

The U.S. Postal Service defaults on a major bill Wednesday, the first time in the agency's history, and Congress isn't poised to do anything about postal reform before the August recess.

The Senate approved a postal reform bill in April that includes $11 million to avoid the USPS default, but a House reform bill introduced by Reps. Darrell Issa, R-Calif., and Dennis Ross, R-Fla., remains stalled as leadership has made no moves to bring it to the floor. "We're not doing it this week, and it looks like in September we're doing a [continuing resolution]. That leaves us a lame duck, and that's going to be tough," Ross said.

The default, delayed from last year, stems from the Postal Service's inability to pay $5.5 billion in future retiree benefits. And while the mail will still continue to be delivered and postal employees will be paid, businesses affected by the Postal Service worried this default will affect consumer confidence in the agency's ability to pull itself, or get pulled out, of its financial woes.

The Ross-Issa bill would allow USPS to close post offices and renegotiate labor contracts. "The whole purpose of the Postal Service is to be self-sustained so their postage rates fund all of their liabilities, not just their day-to-day [operations]," Ross said. "Unfortunately, the only way that can happen is if we work on the expense side of the equation."

Ross said he believes the votes are there to bring it to the floor for debate, get it passed and to conference committee. "Well, yes, I am frustrated it's not coming to the floor. I've told my leadership that I am ready to do to what's necessary to bring this to the floor," he said.

But leadership doesn't seem poised to do any such thing. Postal Service issues can cut across the liberal-conservative divide, and the House bill could be a tough vote in the approaching election season. Members from rural districts might be hesitant to support the House bill because of its cutbacks, while members from union-heavy areas could worry about provisions cutting benefits and eroding collective-bargaining rights.

Business groups, such as the Coalition for a 21st Century Postal Service want the House bill passed and moved forward. But unions are opposed, with American Postal Workers Union spokeswoman Sally Davidow calling it "a disaster" that "would destroy the Postal Service as we know it."