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Analysis: Postal Service Default All But Inevitable

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A postal sorting facility on the Eastern Shore may be on the chopping block of Congress doesn't pass reforms.
Brian Hefele: http://www.flickr.com/photos/brhefele/5821397541/
A postal sorting facility on the Eastern Shore may be on the chopping block of Congress doesn't pass reforms.

The U.S. Postal Service says it's facing a default on August 1 unless Congress intervenes. The Senate passed a bill this spring to help address financial deficits at the postal service, but the House of Representatives has not passed a version of the bill. As Alex Bolton, senior staff writer with The Hill newspaper, explains, that has some lawmakers from our area concerned.

How likely is it that the House will take up legislation on this before the August deadline?

"I think there is very little chance that the House will act. In fact, observers in the Senateso there is virtually no chance of House action. Even if the House acted, even if the House moved a bill through the chamber, there wouldn't be enough time to put together a conference committee and negotiate the differences between the Senate and House bills."

Why doesn't there seem to be movement on this?

"Dennis Ross (R-Fla.), the sponsor of the House bill, says that the Senate bill is unacceptable because it gives a lot of money to the Postal Service without providing reforms. He has very strong reforms in his bill to make the Postal Service work more likely a business and to trim its network of facilities around the country. The problem is, rural Republicans have a problem with this bill. Rural areas are more dependant on the Postal Service than urban areas. It seems that there is dissention in the House Republican conference right now. As a result, House Speaker John Boehner doesn't seem eager to bring a bill to the floor and bring that rift out into the open."

If the Postal Service defaults, what would that mean for consumers? Would we be able to mail things?

"We'll still be able to mail. The Postmaster General has said that he'll be able to juggle some things around after August 1 to keep operations running. Sen. Joe Lieberman, the chairman of the Senate Reforms Committee, said they'll probably be able to cut down hours in locations across the country. Employees will be affected — they'll be working shorter hours and making less money. The service will go on. But if this doesn't get resolved by the beginning of next year, we're going to see the closure of postal processing facilities and that will certainly affect service."

What are you hearing from local lawmakers on this issue?

"They're concerned. I spoke with Sen. Ben Cardin (D-Md.) and Mark Warner (D-Va.) today, both are concerned with this impasse. They say the House should act. Of course, these are Senate Democrats, so they bring their own perspective to the standoff. Ben Cardin is particularly concerned with a processing facility on the Eastern Shore in Easton, Md. — it employs about 130 people. He doesn't think that any of these employees are in danger of being fired or losing their jobs as a result of this looming default. However, if things remain at an impasse for the rest of this year, then postal processing facilities like the one in Easton could come under threat."

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