Next DC crisis: The Postal Service is broke

Washington loves a good crisis, and it has had no shortage of them this year, from a near-shutdown of the federal government in April, to the 11th-hour negotiations over the federal debt ceiling that resulted in a downgrade of the US’s credit rating, to this summer’s brief and costly FAA shutdown. There are more fiscal crises on the horizon, too. Congressmen aligned with the tea party movement are threatening to let the federal gas tax expire at the end of September, putting transportation funding for highways and mass transit at risk.

And now comes the latest apocalyptic moment — the US Postal Service is months away from going out of business.

The Postal Service doesn’t have the cash to make a $5.5 billion payment this month into a fund for retirees’ health care. That default is small, compared to the one that will follow in the coming months. By early next year, the Postal Service will run out of cash to pay employees and become insolvent, agency officials told the New York Times yesterday.

Today, Postal Service officials will go before Congress and likely ask for substantial financial assistance in avoiding a shutdown. The agency is facing a $9.2 billion budget shortfall this year. It needs Congressional authorization to lay off 120,000 employees, since it signed a union contract last year that extended a long-held no-layoff clause. It also needs cover from Capitol Hill to slash its real estate holdings and scale back services — proposals that will likely prove politically unpalatable.

There are already signs that the same sort of ideological divides that precipitated this year’s earlier fiscal crises could be converging on the Postal Service. Rep. Darrell Issa, a powerful California Republican, is looking askance at what he calls back-door bailout proposals, and instead wants to see massive cost-cutting in order to keep the mail flowing. Sen. Susan Collins of Maine tells the Times that proposals to cut costs by cutting services would be “counterproductive.” And the union representing postal sorters and clerks is promising to lobby hard to preserve job guarantees. All in all, it’s another recipe for legislative gridlock in the face of a mathematically-certain day of reckoning. That’s not a formula that’s been handled well this year.

                                                                                                                                                                        –PAUL MCMORROW

BEACON HILL

The Globe looks at proposals to authorize and regulate ticket resales in Massachusetts, which are on tap to be considered by the Legislature in the coming year.

9/11 ANNIVERSARY

With the nation preparing to observe the tenth anniversary of the 9/11 terrorist attacks, the Globe offers a lengthy look at the lives over the past decade of Boston airline workers who carry scars from the attacks. The Herald carries a remembrance from staff photographer Matthew West, whose father was killed in the World Trade Center when the planes hit.

MUNICIPAL MATTERS

Quincy officials will seek permission to get rid of a state-designated habitat for rattlesnakes next to the Pine Hill Cemetery so they can expand the city-owned cemetery adjacent to the Blue Hills.

A Lowell homeless shelter is preparing to move to larger quarters in the heart of downtown, and the Lowell Sun reports that many are raising concerns.

A Raynham businessman who was active in town government and civic programs became the first person in the state to die of Eastern equine encephalitis, and his family and town officials are blasting the state for not taking enough precautions to rid the area of infected mosquitoes.

How not to get elected: a Pittsfield mayoral candidate pushes and curses at a city police officer.

NATIONAL POLITICS/WASHINGTON

GOP operative Mike Lofgren leaves his job behind, complaining that “the Democrats have their share of machine politicians, careerists, corporate bagmen, egomaniacs, and kooks. Nothing, however, quite matches the modern GOP.”   

A Weymouth man is trying to persuade Congress to change the rules that allow veterans who died after 1990 to have a medallion placed on their headstones for free while the families of all those who died prior have to pay $55 for the replica.

States consider how to deal with unfunded pension liabilities, and Rhode Island may be showing the way with deep cuts in benefits for retirees.

ELECTION 2012

A WBUR poll indicates US Sen. Scott Brown holds a commanding lead over his Democratic challengers, with undeclared candidate Elizabeth Warren trailing him by the smallest margin. Steve Koczela of the MassINC Polling Group, which conducted the survey, says Brown and Warren are essentially tied among female voters. Meanwhile, Warren delivers the keynote but doesn’t jump in the race quite yet at the Greater Boston Labor Council’s annual Labor Day breakfast. Paying her the ultimate labor tribute, the head of the union group says Warren understands the concerns of working families in the same way Ted Kennedy did.

US News & World Report says Sarah Palin can’t make up her mind whether she wants to run or be a kingmaker, but time is running out on both.

Top aides leave Michele Bachmann’s campaign.

Mitt Romney says he’s the man to turn around the American economy in this USA Today opinion column. In South Carolina, he tried to win over Tea Party types and social conservatives, declaring, “I go on my knees,” when asked about the decision-making process he would use as president. But he apparently gets credit for saying he’s not above the Supreme Court, so there’s that.

President Barack Obama drops some hints about this week’s jobs speech in a Labor Day speech, saying a raft of infrastructure proposals would allow construction workers to “get dirty.”

The Wall Street Journal’s Gerald Seib says it’s no sure thing that Democrats will get routed in the 2012 Congressional contests, since voters blame Republicans more than Democrats for the S&P credit downgrade, and all of Congress is historically unpopular.

BUSINESS/ECONOMY

The Springfield Republican backs the federal government’s decision to sue the 17 major banks that played a significant role in creating the housing bubble that fueled the economic meltdown.

EDUCATION

The Globe reports that the state will begin awarding some higher education funding based on state colleges’ and universities’ plans for boosting student achievement, not just on their enrollment numbers.

TRANSPORTATION

In his final days as MBTA general manager, new Transportation Secretary Rich Davey sat down with Jon Keller to talk about the embattled transit agency and said a fare increase is “absolutely on the table for the next fiscal year.”

ENERGY/ENVIRONMENT

Time asks: Is Obama bad for the environment?

The MetroWest Daily News looks at how Irene tested the state’s hurricane readiness.
 
CRIMINAL JUSTICE

Ohio sells one of its prisons to Corrections Corp. of America for $72.7 million and agrees to pay the company $44.25 per inmate per day.

A mother and her two children from Lawrence were found shot to death in their home; police suspect the mother’s boyfriend, the Eagle-Tribune reports. NECN reports the boyfriend confessed, but his motive remains unclear.

END OF AN ERA

The Berkshire Eagle says that the baseball and the nation have moved on from the game’s steroids controversy, so it matters not what ultimately happens to Roger Clemens.