Calls come after USPS announced it lost money on consolidation plan last year.
Lawmakers on both sides of the aisle are expressing deep skepticism over the U.S. Postal Service's plans to shutter more facilities and in the process shed more jobs as part of its consolidation strategy, pointing to the initial closures that actually lost money for the agency.
Sen. Claire McCaskill, D-Mo., wrote a letter to Postmaster General Megan Brennan on Tuesday to “demand” answers on the losses incurred by the Postal Service as it moved forward with the second phase of its “network rationalization” plan last year. USPS lost $66 million from closing facilities in fiscal 2015, as the increased transportation costs outweighed the savings in parts and labor. The agency said it would have benefited from the plan to shutter 82 processing plants if it had not been cut short due to concerns over delivery standards.
McCaskill -- who has for years fought to preserve postal services, especially in rural areas -- said that while USPS could have seen its savings diminished by the truncated consolidation implementation, the initial results do not bode well for the future.
“As you are well aware, the USPS financial situation is dire,” McCaskill wrote. “The USPS has no financial flexibility to continue making decisions that both degrade its service and increase costs.”
For its part, the Postal Service is not concerned about what McCaskill referred to as “unforeseen costs” that may crop up going forward.
“In the early stages of implementing phase two, the decision was made to hold back on the remaining consolidations until 2016,” USPS spokesman Dave Partenheimer has told Government Executive. "This resulted in significant deferred savings, and a net cost for 2015 in phase two. If phase two had been fully implemented, the savings would have greatly exceeded the transportation investment costs.”
The Postal Service implemented the first phase of its rightsizing initiative beginning in 2012, closing 141 facilities. Those closures generated annual cost savings of $865 million and resulted in “negligible” service impacts, according to the Postal Service, but McCaskill asked for more details. The senator requested specifics on the costs and savings associated with both phases of the plan, broken down by each cost category, as well as assumptions that went into those estimates.
McCaskill’s letter follows the introduction of the 2016 Stop Postal Closures Act, authored in the House by Rep. Jared Huffman, D-Calif. The measure would place a moratorium on facilities currently scheduled for consolidation -- USPS has said the remaining facilities it plans to shut down in phase two will remain open indefinitely -- and require more oversight from USPS’ regulator in any future closures. Huffman noted the consolidation plan required the Postal Service to slow its delivery schedule, including through virtually eliminating overnight mail delivery. The Postal Service has taken heat for failing to meet its reduced delivery standards and forcing letter carriers out later at night due to the reduction strategy.
“We all want a modern, efficient Postal Service, but continuing to reduce service standards and close facilities is not the way to deliver for the American people,” Huffman said of his bill. “It is time to hold USPS accountable for its business actions and how they affect our constituents and their needs.”
Rep. Jose Seranno, D-N.Y., and Republican West Virginia Reps. David McKinley and Even Jenkins signed onto the legislation, which would require USPS to analyze any closure’s impact on small businesses, vote-by-mail operations and “unique geographic situations.” It would also reinstate the Postal Service’s one-to-three day delivery window, which was slowed in 2012. A House committee in 2015 approved reinstating those standards through an appropriations bill, though it failed to advance.
USPS management has called such a provision “financially and operationally indefensible,” with a spokeswoman saying the agency “simply cannot afford costly, legislatively-mandated inefficiencies that undermine our viability as a self-funding entity.” The Congressional Budget Office last year similarly concluded the Postal Service could not afford to meet to meet the old delivery standards, which would require the agency to hire more employees and reopen closed facilities.
Still, many in Congress have promised to put up a fight.
“Rural residents, in particular, depend on the U.S. Postal Service to pay bills on time and stay connected,” Jenkins said, “and I will work to protect this important service for them.”
A more comprehensive postal reform bill introduced by Sen. Tom Carper, D-Del., last year would place a two-year moratorium on the USPS consolidation plan. The consolidation plan was originally scheduled to shed 7,000 jobs, while relocating more employees.
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