The question of where the money will come from to bail the U.S. Postal Service out of a deep financial hole stemming from sagging revenues, volume declines, the Sept. 11 terrorist attacks and the anthrax scare is unclear.
Last week Postmaster General John Potter, asked for a total of $5 billion; $2 billion to cover revenue lost as a result of September’s events, plus another $3 billion to sanitize postal facilities from exposure to anthrax and other toxic biological agents. He made the request while testifying about the postal service’s financial troubles before the Senate Appropriations Committee’s treasury and general government subcommittee.
Although the panel, chaired by Sen. Byron Dorgan (D-ND), is expected to recommend that the full committee, chaired by Sen. Robert Byrd (D-WVA) endorse the request, it remains unclear whether the bailout funds will be included or added in the $40 billion the government previously pledged to meet national security needs.
So far $175 million of the $40 billion supplemental government appropriation has been earmarked for the USPS, which ended fiscal 2001 with a $1.35 billion deficit, its third in as many years. The USPS, in an attempt to shore up its finances, is seeking Postal Rate Commission support for a third rate hike in 18 months, containing an average of 8.7%, which would generate some $1.6 billion in new revenue.
Several hours after Potter’s impassioned plea for government help to keep the financially ailing USPS afloat, President Bush dodged a reporter’s question about a possible government bailout of the USPS.
“We’re listening to all requests,” the President said, adding that “we are looking at all opportunities to spend money in our government, and we’re going to make sure that any supplemental [appropriation] that may or may not occur next year fits into an overall national strategy.
“I told appropriators in Congress that we believe we’ve got ample money to make it through the holiday season and the beginning of next year; that $40 billion that they appropriated in the supplemental [appropriations bill] is ample to meet our homeland security needs, as well as our defense needs; and that before we spend more money, let’s make sure we have a national strategy to deal with the homeland defense issue. And that’s—the postal service is part of the homeland defense.”
President Bush urged Congress not to break the budget agreement that was hammered out in early October, three weeks after the attacks, saying that he felt the $40 billion appropriation to deal with their after effects was “enough to meet the nation’s needs. “
Jerry Cerasale, the Direct Marketing Association’s senior vice president, government affairs, said he hoped that whatever financial aid the USPS gets comes out of the $40 billion and not from mailers. “Having mailers pick up the full freight” to keep the USPS financially viable would result in declining volumes and revenues, forcing the postal service to seek larger and more frequent rate hikes, Cerasale said.
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