Congress sat idly by Wednesday as the U.S. Postal Service prepared to default on $5.5 billion in retiree health care payments.
The Postal Service confirmed in a statement Monday that it would default on its payment to the U.S. Treasury due at midnight on Wednesday. It is also prepared to default on a $5.6 billion tab due Sept. 30 to prepay retiree health benefits "absent legislation enacted by Congress."
The Postal Service stressed that the defaults would "have no material effect on the operations of the Postal Service," which would continue to be fully funded, as would services.
But this first-ever default marks the decline of the Postal Service, illuminating just how precarious its financial position remains without congressional intervention. Some lawmakers believe that such postal poverty threatens Congress' reputation as well as the future of the mail service and the nation's economic health.
"The country's looking for the Congress to get things done, the president to get things done, especially get things done that actually saves jobs and creates jobs. And there's some 7 or 8 million jobs that currently depend on the Postal Service," Sen. Tom Carper (D-Del.) Congress' lead Democratic voice on postal reform, told Yahoo News Wednesday. The default, Carper argued, "simply undermines confidence in those who use the post office services, especially the larger mailers," potentially hurting business and much-needed holiday sales.
The Postal Service has reported multibillion dollar losses in part due to the current economic climate and a decrease in mail. Additionally, the service is required by law to prepay billions in health care benefits every year into a retiree health benefit fund. The Postal Service wants Congress to help lower this pre-fund burden and help it via other avenues, but Congress doesn't appear to be acting anytime soon.
In April, the Senate passed a bipartisan bill, cosponsored by Carper, to help save the Postal Service by advocating for cost-cutting measures including restructuring the pre-fund. At the time, House Republicans widely panned the bill, labeling it a $33 billion bailout; they argued it delayed but failed to solve the postal service's financial woes. Rep. Darrell Issa (R-Calif.), chairman of the House Committee on Oversight, co-sponsored with Rep. Dennis Ross (R-Fla.) a bill in the works, but it has yet to be brought to the House floor.
The Postal Service and other interested parties as well as Republicans criticized the Senate bill once it passed. But Carper said Wednesday the House is holding back opportunities to move forward and make adjustments.
"The House simply has to do what they've been saying they're going to do all along and that's to pass a bill so that we can then go to conference, work out our differences, come up with a compromise between the Senate bill and the House bill," Carper said, adding, "Our bill's not perfect ... but until we have the House act, we can't come up with that final compromise."
House Minority Leader Nancy Pelosi (D-Calif.) also pointed a finger at House Republicans Wednesday. "To manufacture yet another crisis, the Republican leadership refused to allow consideration of postal reform legislation that passed the Senate with a strong bipartisan majority months ago and that would have easily prevented a default," Pelosi said in a statement. "Instead, Republicans have shown no interest in offering meaningful solutions-- including a path to address the Postal Service's unique requirement to prepay retiree health benefits."
But Republicans say the House bill is still on the table and leaders are actively working on it.
"While timing for the consideration of postal reform legislation has not been set, the legislation has the necessary support,"Ali Ahmad, Communications Adviser for the Oversight and Government Reform Committee, said in a statement to Yahoo News Wednesday. Ahmad said Issa remains committed to modifying the legislation to ensure that "meaningful reforms not only win House approval, but are ultimately signed into law by the President."
The Republican bill allows for more drastic and immediate cuts, such as switching to five-day delivery, cluster box instead of door-to-door delivery, more liberal branch closings and the renegotiation of labor contracts.
As for the current defaults, select House Republicans say it's just more of the same from the failing entity.
"The default by the Postal Service on its obligation to its own employees and retirees follows decades of mismanagement, and a willful blindness to fundamental changes in America's use of mail," Issa said in a statement Tuesday. "The Postal Service continues to fail to do all it can under current law to cut costs."
The House plans to begin recess at the end of this week through the Labor Day holiday, although some congressional leaders have threatened to keep lawmakers in town to finish select business. This would push potential action on the House postal reform bill into the fall. Some lawmakers believe the bill won't come up until the lame duck session or even later.
Saving the postal service is a tricky issue for a number of lawmakers. Many rural voters, seniors and others rely on the postal service, forcing lawmakers who advocate fiscal conservatism to potentially displease some of their constituents by taking sides on government intervention for the postal service.
The postal service's future is often brought up on the campaign trail and at forums and town halls, appearing from time to time in campaign literature.
"Rehberg refuses to explain why he doesn't support Montana's post offices," the campaign for Montana Democratic Sen. Jon Tester wrote Tuesday of Republican opponent Rep. Denny Rehberg. "His failure of leadership may result in post office closures and service cuts across Montana."
In Missouri, the campaign of Democratic Sen. Claire McCaskill cast her Republican opponents in July as threats to the future of the Postal Service.
"And while Claire worked across the aisle to protect Missouri's rural post offices, [Rep. Todd] Akin, [former state treasurer Sarah] Steelman and [businessman John] Brunner all said they would prefer to let the U.S. Postal Service go bankrupt and privatize its services instead," spokesman Erik Dorey wrote in a press release.