September 19, 2011 / 10:01 AM / 8 years ago

Amendment seeks to save US Postal Service $10 bln

* Parts could be controversial in mark-up on Wednesday

* White House to release USPS strategy on Monday

* Plans include ending Saturday mail, front-door delivery

* Also seeks to charge Alaska for rural delivery

By Emily Stephenson

WASHINGTON, Sept 19 (Reuters) - Republican lawmaker Darrell Issa plans to offer an amendment that boosts the annual savings in his bill to overhaul the U.S. Postal Service to more than $10 billion, his office said.

Issa, who is chairman of the powerful House of Representatives Oversight Committee, will announce the amendment on Monday, when the Obama administration is expected to unveil its own strategy for saving the mail carrier.

The Postal Service has watched its core business of delivering mail erode as consumers send email and pay bills online. The agency has said it needs to downsize drastically or it will be unable to deliver mail by the end of next summer.

A draft version of the Issa amendment viewed by Reuters doubles the amount the agency would have to save by closing mail processing facilities, phases out delivery to front-door mail slots, and reduces the postal workforce starting with retirement-eligible workers before laying off other employees.

This adds more than $4 billion in savings, but some provisions contradict USPS policies or could anger lawmakers. A subcommittee will debate and amend, or “mark up,” Issa’s bill on Wednesday.

“Finding greater savings will ultimately give Postal Service leaders greater flexibility to protect core services that are critical for long-term success,” Issa said.

Several bills in Congress take different overhaul approaches. Plans include ending Saturday delivery, allowing the Postal Service to tap into an estimated retirement fund surplus and raising its borrowing limit.

The White House is expected to offer its proposal alongside a deficit reduction package, and at least one House Democrat has said he is thinking about offering a new bill. [ID:nN1E78520T]

CONTROVERSIAL IDEAS

The Postal Service relies on revenue from stamps, packages and other services, not tax dollars, to fund its operations. The agency lost more than $3 billion last quarter.

Issa’s bill would end Saturday mail and set up groups to close facilities and cut costs if the agency misses payments to the federal government. He has refused to consider fixes many lawmakers support, such as returning the retirement fund surplus or restructuring a payment to pre-fund retiree health benefits.

“I’m not going to go along with a fictitious story about taxpayers owing the Postal Service money when the facts show that’s simply not the reality,” Issa said.

His amendment could spark new arguments in Congress.

A spokeswoman for the Postal Service said some of the proposals have been discussed before but were not possible under current law.

The boost in required savings from facility closings follows a new Postal Service plan to close processing sites. Some lawmakers supported the proposal, but many have fought planned closings in their districts or states in the past.

Issa’s plan to end mail delivery to front doors matches recommendations of the Postal Service inspector general, who reported potential savings by sticking to curbside mail boxes or “cluster” boxes — multiple receptacles in a common area.

But USPS management said the inspector general’s proposals were unrealistic.

(Read the inspector general's report here: here)

The amendment also would require Alaska to pay for costs incurred delivering to residents in remote parts of the state. The plan likely will see pushback from Alaska lawmakers, who already this year criticized the USPS for considering closing some post offices in rural Alaska.

A reimbursement requirement also could be seen to violate the Postal Service’s ‘universal service’ mandate, the USPS spokeswoman said.

A spokesman for Issa said the bill puts all the possible cuts on the table regardless of expected popularity.

Postmaster General Patrick Donahoe last week told reporters he would continue working with Congress to shape an overhaul.

“I’m glad everybody has a plan because they’re interested. If nobody had a plan I’d be sweating it out,” Donahoe said. “It’s key for all of us to work together to craft up long-term legislation that puts us on good financial footing.”

Editing by Eric Walsh

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