Associated Press and Herald staff
WASHINGTON — The Senate has passed overhaul legislation that would allow the financially strapped U.S. Postal Service to avert immediate bankruptcy, giving it a cash infusion while delaying decisions on closing post offices and ending Saturday delivery.
The bill passed on a 62-37 vote.
Under the measure, the postal service would get an $11 billion refund of overpayments made to a federal fund to pay down debt and finance buyouts to 100,000 postal employees.
At the same, it would halt the closing of more than 100 mail processing centers, possibly including one in Everett, bar any shutdowns before the November elections and protect rural post offices for one year.
The issue now goes to the House, which has yet to consider a separate bill.
Closure of the Everett mail processing facility would mean the loss of nearly 100 jobs, as well as next-day delivery of first-class mail sent in Western Washington. The Everett facility at 8120 Hardeson Road processes 1 million outgoing letters and parcels daily and serves communities from Lynnwood north to the Canadian border.
“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 said the current proposal failed to address longer-term fixes and 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 years or three years.
The Postal Service said Wednesday it preferred legislation “that will provide it with the speed and flexibility to adapt to a changing marketplace for mailing and shipping products.”
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 agency, $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 proposes cutting about half the mail processing centers the Postal Services wants to close, from 252 to 125, and allowing more areas to maintain overnight first-class mail delivery for at least three more years. Beyond the one-year freeze on closing rural post offices, the Postal Service would face additional layers of approval before closing any mail facility.
The Postal Service on Tuesday circulated a smaller list of mail processing centers that probably would close under the Senate bill; many in more rural or small states would be spared. For instance, centers would survive in Connecticut, Delaware, Maine, Missouri and Vermont, whose senators were sponsors of the postal bill or pushed amendments, according to the preliminary list obtained by The Associated Press. A facility in Easton, Md., also would stay open. Sen. Barbara Mikulski, D-Md., previously attempted to block the postal bill in protest of that specific closure.
Also surviving were all four mail processing centers in Nevada, home to Senate Majority Leader Harry Reid, as well as all eight centers in Colorado and all five centers in Utah.
The Postal Service would get an infusion of roughly $11 billion, which is basically a refund of overpayments made in previous years to a federal retirement fund. The money could pay down debt and finance buyouts to 100,000 postal employees.
The agency could make smaller annual payments into a future retiree health benefits account, gain flexibility in trimming worker compensation benefits and find additional ways to raise postal revenue under a new chief innovation officer.
An amendment approved Tuesday would bar the Postal Service from closing post offices for one year if they are in areas with fewer than 50,000 people, unless there was no significant community opposition.
After one year, the agency would have to take rural issues into special consideration. Post offices generally would be protected if the 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 Sen. Claire McCaskill, D-Mo., who co-sponsored the amendment. “This amendment protects rural post offices, with a realistic eye toward the future.”