EcommerceBytes-NewsFlash, Number 3001 - February 14, 2013     1 of 5

US Postmaster General Warns Senate of Taxpayer Bailout

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Postmaster General Patrick R. Donahoe told a Senate committee on Wednesday he needed Congress to help the Postal Service close a $20 billion budget gap, and said Congress needed to act to avoid a taxpayer bailout of the organization. He said the USPS would continue to take aggressive steps to increase revenue and reduce operating expenses.

Donahoe told the Senate Homeland Security and Governmental Affairs Committee that the Postal Service could soon be running deficits in the range of $10 to $15 billion dollars annually, and said Congress could avoid a taxpayer bailout of the postal service that could be in excess of $45 billion dollars by 2017 if the USPS business model does not change.

"To preserve our mission to provide secure, reliable, and affordable universal delivery service, the Postal Service needs urgent reform to its business model. The American people deserve a financially healthy Postal Service. We will continue to work together with Congress to achieve that goal." Donahoe told the committee that the Postal Service is seeking legislative provisions that would:

  • Require the Postal Service to sponsor its own health care plan;
  • Reform the USPS business model to remove restrictions that prevent the Postal Service from responding to the demands of the marketplace, and to enable it to compete much more effectively in a dynamic business environment;
  • Transition the Postal Service to a new workforce based on a redefined “employee of the future.” This would include a personal retirement contribution plan for employees joining the Postal Service after 2015 - versus a defined benefit plan;
  • Provide a proper calculation of its Federal Employees’ Retirement System (FERS) surplus based upon data specific to the postal workforce, and then allow those funds to reduce the debt of the Postal Service;
  • Avoid restrictions on the announced move to a six-day package, five-day mail delivery schedule.

National Association of Postmasters of the United States (NAPUS) President Robert Rapoza also testified before the Senate committee on Wednesday and called for the U.S. Postal Service and the Congress to implement meaningful strategies to generate the revenue necessary to sustain the continuation of a universal postal system.

In his testimony, Rapoza pointed to the growing parcel market as an important opportunity to raise funds. "The Postal Service must not simply ride the wave of the accelerating growth in the parcel market, but must capture a significant share of it." He said, post offices were uniquely situated to provide a secure, affordable and accessible point for parcel preparation, acceptance and delivery and pointed out, "The physical presence of post offices provides a major competitive advantage" for the Postal Service.

The remarks of the Postmaster General and NAPUS President are available online (note that the remarks as delivered may vary from the prepared text).

About the author:

Ina Steiner is co-founder and Editor of EcommerceBytes and has been reporting on ecommerce since 1999. She's a widely cited authority on marketplace selling and is author of "Turn eBay Data Into Dollars" (McGraw-Hill 2006). Her blog was featured in the book, "Blogging Heroes" (Wiley 2008). Follow her on Twitter at @ecommercebytes and send news tips to

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