Post Office Needs Bailout

The post office had a $384 million loss in the first quarter of the fiscal year—October through December—which is usually the busiest period because of the holidays.

Officials said the recession has contributed to a mail volume drop of 5.2 billion pieces compared to the same period last year. If there is no economic recovery, the USPS projects volume for the year will be down by 12 billion to 15 billion pieces of mail.

Over the past year the post office says it has cut 50 million work hours, stopped construction of new facilities, frozen salaries for executives, began selling unused facilities and has cut post office hours.

Last year's high fuel prices also sapped funds from the post office, which operates more than 200,000 vehicles. Every 1-cent increase in the price of fuel costs the post office $8 million.

Blair also noted that Congress could consider appropriating money to help the post office. The agency does not receive a taxpayer subsidy for its operations, although Congress does subsidize overseas voting and free mail for the blind.

William Young, president of the National Association of Letter Carriers, stressed in his testimony that the agency is not seeking a taxpayer bailout, "but we are here to ask the Congress for help."

"At this moment, the survival of the Postal Service—a venerable institution that is literally older than our country—hangs in the balance," Young added.

Lawmakers also raised questions regarding recent news reports that Potter is paid as much as $800,000 a year. That is not correct, Potter said. He said his salary, set by Congress, is $263,575. He said the news reports were counting his retirement fund, the cost of his security detail and a $135,000 bonus that would be paid over 10 years after he retires.

The bonus is based on improved delivery rates and customer satisfaction, he said. Under the current financial conditions, Potter said, he would not be eligible for a bonus this year.