Home|  Postal News |  About | Search|   Editor

 Postal Service: Revenue Forgone Appropriation 

source: OMB Report: Major Savings and Reforms in the President's 2006 Budget." (pdf)"

posted February 10, 2004-

According to the Wall Street Journal,  lawmakers are debating whether the U.S. postal system lacks the funds to install sufficient safeguards to cope with terrorist attacks. After the anthrax attacks of 2001, which killed five people, including two postal workers, the U.S. Postal Service hired contractors to install irradiation equipment designed to neutralize anthrax spores. But deployment has been limited to mail intended for government offices. Although the U.S. Postal Service has spent more than $500 million on biodefense since the anthrax attacks, it hasn't attached anthrax biosensors to the equipment. Nor has it begun to roll out a planned expansion of the irradiation system to cover mail delivered to most of the 128 million homes and 12 million businesses in the U.S.

 The president's budget for the fiscal year that starts Oct. 1, unveiled on Tuesday, proposed only $37 million for the Postal Service, far short of the $779 million for biodefense requested by the agency. It has vowed to go directly to Congress to seek these funds, including $384 million in reimbursement for money already spent out of its own revenue. A spokesman for House Appropriations Committee Chairman Bill Young (R., Fla.), said that, as a rule, Congress tends to be "very reluctant" to provide direct appropriations to an agency that's "supposed to be self-sustaining." Ira Cohen, spokesman for Rep. Danny Davis (D., Ill.), said his boss favored more funding in the 2005 budget to upgrade biodefense in the postal system. "If you're going to give the Postal Service the added responsibilities of homeland-security issues, why should that be financed" out of Postal Service revenues, he said. Rep. Davis is a member of the Government Reform Committee, which has been considering a Postal Service revamp.

While the ricin scare renewed focus on the postal system, experts pointed out that while irradiating equipment could play a role in neutralizing anthrax, it wouldn't neutralize an inert poison such as ricin. Sensitive to any suggestion that the agency is dragging its feet, the Postal Service insists its terrorism-fighting efforts aren't falling behind. "We are right on schedule," said Thomas Day, vice president of engineering at the Postal Service. He also said the agency will try to find more money for biohazard-detection equipment even if Congress doesn't provide funds. "We are still committed to doing it, and it would have to come from our operating funds," he said. A protracted funding logjam could trigger the shutdown of some mail processing and distribution centers in order to reduce the overall cost of additional detection equipment. But any move toward widespread closings is likely to face fierce opposition from the unions that represent most of the Postal Service's 750,000 employees.

 Postal officials also could shift a bigger chunk of security costs to anyone who mails a letter or package. The Postal Service is expected to start seeking approval in early 2005 for its next rate increase, which would take effect about a year later. Consumers and businesses already have been hit by three rate increases since the start of 2001.

- 2005 Federal Budget Lacks USPS Emergency Funding-The U.S. Postal Service requested $779 million for bio-defense in 2005. The agency said part of that $779 million already has been spent, with the rest to be spent next year. The USPS last received emergency-preparedness funding in the 2002 fiscal year, when it got $762 million. Postmaster general John E. Potter sent a letter Feb. 2 to Rep. John W. Olver, D-MA, of the House Subcommittee on Transportation and Treasury, and Independent Agencies -- which has jurisdiction over the USPS. Potter wrote that the funds the agency requested are consistent with its Emergency Preparedness Plan, which was submitted to Congress on March 6, 2002, and updated April 30, 2003. If this money is not included in the federal budget, Bob McLean, executive director of the Mailers Council said, it would have to be built into postal rates. The USPS is expected to start seeking approval in early 2005 for its next rate increase, which would take effect about a year later. However, McLean said, if it is determined that someone brought it in and dropped it in the Senate mailroom as opposed to it being sent through the mail, "then I don't think the postal service gets any bump out of this at all."  (DMNews- 2/12/04)

Below are excerpts from ....

Budget of the United States Government

Bush cuts would affect over 100 programs

• $87,000,000 from the Supplemental Appropriations Act of FY 2002 for Further Recovery from the Response to Terrorist Attacks on the United States (P.L. 107–206) to further protect postal employees and postal customers from exposure to biohazardous material and to sanitize and screen the mail.

 Pursuant to Public Law 93–328, the 2005 appropriation request of the U.S. Postal Service for Payment to the Postal Service Fund is $75,881,000. This amount includes: $69,803,000 requested for free mail for the blind and overseas voting; and $6,078,000 as a reconciliation adjustment for 2002 actual mail volume of free mail for the blind and overseas voting. In addition to these funds, $36,521,000 (an advance appropriation from 2004 for the 2004 costs and the 2001 reconciliation adjustment for free mail for the blind and overseas voting) will become available to the U.S. Postal Service in 2005.

Postal Reform Summary03.18.05 (doc. 45.5 KBs)