USPS Can’t Afford to Reopen Facilities and Add Employees Like Congress Wants

A provision tacked on to a funding bill in Congress would force the U.S. Postal Service to spend $300 million next year on hiring more employees and reopening facilities, according to a new estimate.

The House Appropriations Committee’s amendment would actually come with a price tag of more than $1 billion for fiscal 2016, according to the Congressional Budget Office, but USPS could not realistically afford those costs and would likely only invest the $300 million into complying with the law. The measure was attached to the fiscal 2016 financial services and general government appropriations bill.

The amendment, which was approved in a 26-23 vote with mostly Democratic support, would restore the delivery standards in place in 2012. If signed into to law, USPS would once again have to deliver most first-class mail not leaving a city overnight.

The Postal Service previously reduced the amount of mail it delivered overnight and shifted a substantial amount of mail from a two-day delivery standard to a three-to-five day range. Overall, USPS downgraded its delivery standards for about 28 percent of first-class mail. USPS cited those changes as necessary to enable it to consolidate facilities and rely less heavily on air delivery. The agency shuttered 141 processing facilities in 2012 and 2013, and had begun closing an additional 82 in 2015 before it suddenly decided to cancel those plans last month.

CBO said in order to meet the requirements of the amendment, the Postal Service would have to add work hours, reopen facilities that were closed or sold and reacquire equipment it no longer owns. The investment would not necessarily be a wise one for USPS, as the amendment only pertains to fiscal 2016 and the Postal Service would likely once again shutter the reopened facilities and sell off the equipment in fiscal 2017.

Slower mail delivery and the corresponding consolidations have generated controversy and proved major sticking points in delivering comprehensive reform to the agency. Mailers and lawmakers have complained products would reach consumers more slowly, while unions have bemoaned the massive job cuts and relocations. The Postal Service has defended the changes, saying the first phase is saving the agency $865 million annually, while the new round of cuts would generate an additional $750 million each year.

Even if the provision were enacted, the Postal Service would likely have to ignore some of its requirements.

“CBO expects that reconfiguring agency operations to fully meet the 2012 delivery standards during fiscal year 2016 would probably cost significantly more than $300 million,” CBO Director Keith Hall wrote in a letter to lawmakers. “However, in CBO’s judgment the USPS does not have sufficient resources to do that, and the agency’s past actions demonstrate that it likely would give continued funding of its daily operations a higher priority than attempting to comply with a new Congressional mandate.”

He went on to say the $300 million was all the Postal Service could afford to spend on complying with the amendment.

USPS blasted the amendment when the Appropriations Committee voted to approve it in June.

“[The] House Appropriations Committee vote to roll back mail delivery service standards to 2012 levels is financially and operationally indefensible, and the Postal Service strongly encourages the Congress to remove this requirement,” Sarah Ninivaggi, a USPS spokeswoman, said last month. “The Postal Service simply cannot afford costly, legislatively-mandated inefficiencies that undermine our viability as a self-funding entity.”

Mail volumes will continue to decline, she added, and reinstituting old standards is ignoring that “economic reality.”