Postal Updates

By Bill McAllister, Washington Correspondent

Obama 2017 budget plan for U.S. Postal Service likely dead on arrival

February 12, 2016 12:40 PM

  • President Barack Obama's fiscal 2017 federal budget, submitted Feb. 9, addresses the United States Postal Service's continuing financial challenges. Influential mailing organizations give the president's plan little chance of passing in Congress.


By Bill McAllister, Washington Correspondent

When President Barack Obama submitted his final federal budget to Congress Feb. 9, it was pronounced DOA — dead on arrival — by many.

Little noticed among the myriad proposals was the president’s plans for the troubled United States Postal Service.

Admittedly, it wasn’t easy to find the president’s solution to the Postal Service’s continuing financial woes.

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His ideas began on page 1330 of the appendix to the almost $4 trillion fiscal 2017 spending plan, and they were in small type.

Leaders of two major mailing groups — the Association for Postal Commerce and the Alliance of Nonprofit Mailers — told Linn’s that they believe it is unlikely that Congress will endorse the president’s postal plan.

Gene Del Polito, president of the Association for Postal Commerce, was brief when asked if Obama’s ideas were DOA.

“That would be about right,” Del Polito said.

Stephen M. Kearney, the former head of stamp services at USPS, now executive director of the Alliance of Nonprofit Mailers, offered a slight chance that lawmakers might do something.

“It’s not beyond the realm of possibilities Congress will pass postal legislation this year, but highly unlikely,” he said.

“The President’s budget is very similar to the previous two years’ [budgets] and nothing happened with them. Now we have a President in his final year in office which makes it difficult to enact his priorities,” said Kearney.

Sen. Tom Carper, D-Del., who has been urging postal reform more than anyone on Capitol Hill, was delighted.

Obama’s ideas incorporated some of the senator’s key points for helping the financially troubled agency.

The budget includes Carper’s idea that the Postal Service should be allowed to keep the 49¢ stamp it won as a temporary rate increase in late 2013.

“His proposal includes reforms similar to what I have offered in my bipartisan legislation to stabilize the Postal Service and modernize it for the 21st century,” Carper noted in a statement.

The Postal Service said it was appreciative of the president’s recommendations, but said nothing about the prospect that lawmakers will agree.

“We appreciate that President Obama has acknowledged the enormous value of the United States Postal Service to the nation’s commerce and communications,” said spokeswoman Sarah Ninivaggi.

“In the 2017 budget proposal, the president continued to recognize the urgent need for postal reform to ensure the Postal Service’s future viability,” she said. “We look forward to working with the Administration, Congress and our stakeholders to enact legislation that will help stabilize our financial outlook.”

What are the ideas that Congress seems to be avoiding?

Most controversial, perhaps, is the Obama plan to allow the Postal Service to keep rates at the emergency level set by the Postal Regulatory Commission as a temporary measure.

That plan, which would give the USPS an additional $2 billion a year in revenue, has been strongly opposed by a coalition of big mailers.

It also has been a key part of Postmaster General Megan Brennan’s recovery plan.

The president’s plan would recalculate the Postal Service’s debts, giving the agency $5.7 billion in financial relief through 2016.

It would also allow the USPS to revive its plan to end Saturday deliveries if mail volume drops below 140 billion pieces for four consecutive quarters, and to continue to close small and rural post offices.

The USPS would continue to pay for its retiree health costs, but on a 40-year schedule instead of the 10-year plan enacted in a 2006 law that led to the agency’s current financial problems.

It would “set USPS on a sustainable business path, providing it with over $27 billion in cash relief, operational savings and additional revenues through 2020,” the budget states.

At the moment, however, Congress does not seem willing to adopt the Obama plan.