Defensive House Republican Leaders Keep Pushing Postal/Highway Plan

Another memo goes out to GOP lawmakers “setting the record straight” about the controversial proposal.

U.S. Postal Service employee Arturo Lugo delivers an Express Mail package during his morning route on February 6, 2013 in Los Angeles, California.
National Journal
Billy House
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Billy House
June 9, 2014, 5:30 p.m.

House GOP lead­ers went on de­fense Monday with their con­tro­ver­sial pro­pos­al to cut Sat­urday postal de­liv­ery to cre­ate sav­ings that could keep the High­way Trust Fund from go­ing broke this sum­mer.

In a memo to fel­low Re­pub­lic­ans en­titled “Set­ting the re­cord straight,” the lead­er­ship ar­gued: “This isn’t the first time the Postal Ser­vice has had to change its de­liv­ery prac­tices. Fa­cing fin­an­cial prob­lems in 1950 the Postal Ser­vice ended twice-a-day at home mail de­liv­ery.”

They also warned that most House Re­pub­lic­ans won’t like the al­tern­at­ives be­ing con­sidered on the oth­er side of the Cap­it­ol, where “sen­at­ors are cur­rently dis­cuss­ing a list of ap­prox­im­ately 10 user fees and tax in­creases.

“The most pop­u­lar, ap­par­ently, is to im­pose a tax on oil at the whole­sale level — which es­sen­tially is a way of im­pos­ing a new gas tax at the front end of the pro­cess,” de­clares the memo sent out by Ma­jor­ity Whip Kev­in Mc­Carthy.

The GOP pro­pos­al to cut most Sat­urday postal ser­vice to res­cue the high­way fund has been widely panned by con­gres­sion­al Demo­crats and out­side con­ser­vat­ive groups since it was first floated in a lead­er­ship memo to Re­pub­lic­an House mem­bers 10 days ago.

Most of the cri­ti­cism has centered on de­pic­tions of the plan as no more than a budget ac­count­ing trick be­cause it de­pends on avert­ing some hy­po­thet­ic­al fu­ture Postal Ser­vice bail­out as real money now to re­plen­ish the high­way fund for one year.

The GOP re­sponse to that cri­ti­cism comes in the new memo cir­cu­lated by Mc­Carthy, also labeled as com­ing from Speak­er John Boehner and Ma­jor­ity Lead­er Eric Can­tor.

“Ab­sent a trans­fer in­to the High­way Trust Fund, in late Ju­ly/early Au­gust there will be in­suf­fi­cient funds to re­im­burse states for on­go­ing high­way con­struc­tion pro­jects,” the memo warns.

The di­lemma stems from the fact that 90 per­cent of the fund’s rev­en­ue comes from the 18.4-cents-per-gal­lon fed­er­al tax on gas­ol­ine and the 24.4-cents-per-gal­lon tax on dies­el, neither of which has been in­creased since 1993. Over that 21-year peri­od, mo­tor-vehicle fuel ef­fi­ciency has in­creased sig­ni­fic­antly — mean­ing mo­tor­ists are us­ing far less fuel — and the fund has not kept pace with rising con­struc­tion costs.

“Pro­jects across the coun­try may stop as a res­ult,” states the memo.

The memo then says that get­ting through an­oth­er year of high­way con­struc­tion — “so we have the space to com­plete a multi-year high­way bill” — will re­quire a trans­fer in­to the High­way Trust Fund of ap­prox­im­ately $12 bil­lion. Their idea of cut­ting back Sat­urday postal de­liv­er­ies, the GOP lead­ers have ar­gued, could provide $10 bil­lion over 10 years by avert­ing a bail­out of the strug­gling Postal Ser­vice.

The Re­pub­lic­an lead­ers in­sisted in the memo that the plan “does NOT take any money from the Postal Ser­vice,” and they de­fen­ded the ac­count­ing be­hind it.

“Un­der the uni­fied budget (the de­fi­cit fig­ures every­one cites), a sav­ings to the Post Of­fice re­duces the de­fi­cit. That re­duc­tion in the uni­fied de­fi­cit is off­set­ting the trans­fer to the High­way Trust Fund,” the memo ar­gues.

They also note that post of­fices would re­main open on Sat­urdays both to re­ceive and pro­cess mail; that post-of­fice boxes will re­ceive mail on Sat­urdays; and that pack­ages will still be de­livered along with medi­cine and pri­or­ity and ex­press mail.

“No postal em­ploy­ees will be fired as [a] res­ult of this change,” the memo says. “Nat­ur­al at­tri­tion and vol­un­tary buy­outs of re­tire­ment eli­gible em­ploy­ees will en­able the Postal Ser­vice to be­gin right-siz­ing its work­force.”

And they note that, “[a]bsent a change in the law to per­mit the Postal Ser­vice to go to mod­i­fied six-day de­liv­ery, the Postal Ser­vice will have to make even big­ger changes else­where; these would likely in­clude high­er postal rates and the clos­ing of ad­di­tion­al fa­cil­it­ies.”

“It still sounds like Obama­care-style double count­ing,” re­spon­ded Dan Holler, a spokes­man for Her­it­age Ac­tion, one of the con­ser­vat­ive groups that have cri­ti­cized the idea.

On the Demo­crat­ic side, Rep. Ger­ald Con­nolly of Vir­gin­ia wrote in a “Dear Col­league” let­ter last week that at­tempt­ing to pro­ject budget sav­ings through “coun­ter­fac­tu­al claims based on avert­ing events that may or may not take place in the fu­ture is sooth­say­ing, not budget scor­ing.”

Mean­while, the Postal Ser­vice it­self re­mains care­ful in its com­ments. The Wash­ing­ton Post re­por­ted that Post­mas­ter Gen­er­al Patrick Do­nahoe — who has pushed to elim­in­ate most Sat­urday de­liv­ery of let­ters as part of a lar­ger, more com­pre­hens­ive re­form ef­fort — re­af­firmed on Monday in an in­ter­view that he fa­vors cuts to six-day de­liv­ery — even if it is part of a high­way fund bail­out plan.

Sen­ate Fin­ance Chair­man Ron Wyden of Ore­gon says his com­mit­tee mem­bers plan to sort out their “pre­ferred” op­tions to ad­dress the High­way Trust Fund short­age this week, and hope to have le­gis­la­tion ready be­fore the Fourth of Ju­ly break.

On Wed­nes­day, Wyden is to be among the speak­ers at a “Rally for Roads” event at Uni­on Square near the Cap­it­ol, where he is to talk about po­ten­tial solu­tions.

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