Friday, November 9, 2001

Postal Service seeks cash, slashes payroll
By Laurie Kellman
Associated Press

WASHINGTON — The Postal Service asked Congress Thursday for $5 billion to help it rebound from the terrorist attacks and said it has cut millions of hours from workers’ shifts in an effort to stay afloat.

Without the money, stamp prices could skyrocket, employee hours could be cut even further and service could be severely harmed, Postmaster General John Potter told a Senate Appropriations subcommittee.

A disruption in the Postal Service, created to “bind commerce together,” could rip the economy apart, Potter added.

“At a time when the economy is challenged, losing credibility in the mail system would exacerbate the downturn that we’ve seen,” he said.

The Sept. 11 terrorist attacks have cost the Postal Service $3 billion to $4 billion, he said, citing damage to facilities, medical treatment, environmental testing and the purchase of new equipment.

Additionally, the service asked for $2 billion to offset the deficit it said would result from the attacks. That’s in addition to the $1.35 billion deficit it already had anticipated.

“We are working on the premise that the leaders of the nation want all the mail system to be protected against this type of terrorist threat in the future,” he said.

Lawmakers agreed that the government should do whatever necessary to help the service bounce back from terrorism, even if that means adding to the $175 million President Bush has already approved.

But lawmakers said the one-time, $2 billion request sounded like an effort to get Congress to save the service from financial troubles that existed before the crisis. The postal system already has requested a 3 cent increase in stamp prices.

“I don’t know that there is much enthusiasm for ‘bailing out,’ quote/unquote, the Postal Service,” said Senate Majority Leader Tom Daschle. “They have ways of addressing their need for resources and they ought to use them.”

Postal officials were quick to defend the $2 billion request.

“It’s not designed to erase our forecasted deficit of $1.35 billion,” said Richard Strasser, the service’s chief financial officer. “It’s designed to take us forward from here.”

In addition to costs related to the Sept. 11 attacks, the Postal Service has been battered by anthrax-laced letters that have left two workers dead, others sick and the public nervous about its mail.

With the crucial holiday mail season looming, Potter said the service is still unsure how high its losses will mount. “Let me assure you that they are enormous,” he said.

Before the attacks, the service planned to cut about 3 million employee jobs each month. But then mail volume dropped 6.6 billion pieces in the month following the attacks from the same period a year earlier.

The result: The service nearly doubled its plans by cutting 11.5 million hours between Sept. 8 and Nov. 2, Strasser said.

The service is not considering laying off workers, but will continue to eliminate positions through attrition, Potter said.

The postal service said the most expensive piece of their request would be equipment to sanitize mail at the location where it’s sent. They haven’t settled on the technology yet, but it’s expensive — officials said irradiation machines cost about $5 million. Eight of those have already been purchased, Potter said.

Several lawmakers have said they want to include aid for the Postal Service as part of a new $20 billion package of spending related to terrorism. Bush said Tuesday, however, he would veto any spending beyond the $40 billion Congress appropriated after Sept. 11 but before the outbreak of mailed anthrax.

Meanwhile, in Bellmawr, N.J., a federal judge closed a postal distribution facility Wednesday after workers complained that they weren’t sure it was free of anthrax. A postal workers union said an outside contractor had cleaned the wrong machine after anthrax spores were found on a bar code-sorting device.