Postal Service to pin bailout plea to terrorism

Responses to anthrax, decrease in mail noted

November 08, 2001|By Marego Athans | Marego Athans,SUN NATIONAL STAFF

WASHINGTON - The U.S. Postal Service is expected to ask Congress today for a multibillion-dollar bailout to help it recover from the anthrax attacks and a nearly 10 percent drop in mail volume since the deadly bacteria began threatening the mail.

With two postal workers dead, three hospitalized and 16,000 on antibiotics as a precaution, Americans are staying away from mailboxes and post offices, postal officials say.

In the nearly two months since anthrax appeared, the postal service has recorded losses of $800 million, meaning that it will far exceed the projected $1.35 billion in red ink it was predicting for the fiscal year that ends Sept. 30 next year.

"Thirty billion pieces of mail have been delivered since [mid-September], yet three letters have caused fear and anxiety among the American public," Postmaster General John E. Potter said yesterday. The bailout is needed, he said, to help the Postal Service protect "one of America's great freedoms, and that is the mail."

The request for a bailout, similar to the one given to the airlines, drew support yesterday from executives of the mailing industry, who gathered in Washington to discuss ways to protect the mail and to endorse the Postal Service's plea to Congress, which is expected to be between $2 billion and $10 billion.

One of those companies, a direct-mail giant named ADVO Inc., pledged $250,000 to increase the Postal Service's $1 million reward for information leading to the arrest and conviction of anyone responsible for the anthrax attacks.

Deficit despite rate increases

The Postal Service, which has faced financial trouble for years, finished the past fiscal year with a $1.65 billion deficit - despite two rate increases this year. A third request, still pending, would add 3 cents to make the price of a first-class stamp 37 cents.

But since anthrax first emerged in a letter dated Sept. 18, the Postal Service has been burdened with costs for measures that were previously unimaginable: testing 260 postal facilities for anthrax (170 have been tested so far, with nine positive, 77 negative); cleaning post offices where trace spores were detected; educating workers and the public about safe mail-handling; providing masks and gloves for employees; and buying machines to sanitize mail.

The Postal Service has already received $175 million in federal assistance to defray some of these costs.

Then there are the hoaxes: More than 400 mail facilities have been evacuated as a result of 10,371 hoaxes, threats or suspicious mail incidents, an average of 610 a day. Twenty-five people have been arrested in connection with hoaxes or threats.

Despite all those burdens, some government watchdog groups say the Postal Service's budget woes have little to do with the anthrax attacks, and taxpayers would be wasting money by bailing it out. The federal government should pay for securing the mail, which is a law enforcement function, the groups say, but that's where the emergency funding should end.

"The Postal Service was having serious financial problems before ... and the root of those financial problems is basically mismanagement and waste," said Rick Merritt, executive director at PostalWatch, a citizens group. "Basically, they're unloading the garbage truck on this one. They're taking out all their old trash that existed long before ... and attempting to wrap it up in a nice tidy package covered by a [multi]billion-dollar bailout from the government."

Whether the bailout is warranted or not, the Postal Service will have to stand in line.

About $400 billion in bailout money, including money accounted for in the president's tax stimulus package, has been requested by industries and institutions since the terrorist attacks began with a wave of airplane hijackings and deliberate crashes on Sept. 11, according to Citizens Against Government Waste. That figure includes the most expensive versions of each request package.

`Already in death spiral'

"Any money they throw at the Postal Service at this point is going to be throwing good money after bad, at an organization that's already in a death spiral," said Leslie Paige, vice president of Citizens Against Government Waste. "None of this requires any offsetting cuts from them, any management changes or accountability. In this climate of alarm it's possible that this money will get wasted."

For their part, executives of the mailing industry, which includes retailers, direct-mail companies and publishers among others whose lifeblood is the mail, lavished praise on the Postal Service yesterday for handling the recent challenges without compromising delivery schedules.

"I have not seen any erosion of service since Sept. 11 at all, and that speaks volumes," said Chris McCormick, president and chief executive of L.L. Bean, the Maine retailer that specializes in outdoors apparel.

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