7 More Reasons the GOP Might Be Starving USPS of Cash

Exactly why House Republican leaders chose not to act on any postal reform legislation before autumn is still a bit of a mystery. But last week’s Dead Tree Edition article on the subject (See 7 Reasons the GOP Might Be Starving USPS of Cash) stirred up plenty of theories and heated comments from all parts of the political spectrum.

Liberals seemed to think I was overly naïve in failing to see the obvious Republican plot to destroy the U.S. Postal Service and let the GOP's cronies loot what’s left. Several conservatives objected to Dead Tree Edition’s supposed liberal bias and questioned why links to this "partisan" article showed up in industry newsletters and LinkedIn groups.

I have a confession to make: Yes, I lean Democratic – whenever I hear Republican politicians yammering. And I start thinking Republican when the Dems start blowing their own hot air. As long as the two parties focus on name calling and sound bites rather than actual solutions, I have no qualms about ridiculing both sides of the aisle.

Anyway, amidst all the vitriol and conspiracy theories, seven additional interesting and sometimes insightful theories emerged to explain the GOP's inaction on the growing postal crisis:

1. Why bail out Obama?: If a real USPS crisis – like mail not getting delivered or people not getting paid – occurs before the election, who will get blamed? Sure, the thinking goes, House Republicans might take some heat for not bringing any bills to a vote. But the big issue would be the Obama Administration’s failure to provide leadership on a crisis that should have caught no one by surprise.


2. All pain, no gain: A vote for USPS cost cutting three months before re-election time? Forget about it. Many Congressmen probably had nightmares about their opponents holding media events at closed post offices or being cheered at rallies of laid-off postal workers. They know that those of us who to preserve the Postal Service by enabling it to balance its budget are poorly organized and will have little impact on this fall’s elections.

Sartell Shutdown Will Cost Verso Dearly

Shutting down the Sartell, Minnesota paper mill will cost Verso Paper Corp. more than the entire company is worth, Verso revealed yesterday.

The Memorial Day fire and explosion at the mill, which has already cost one employee his life and 265 others their jobs, will result in shutdown costs of approximately $114 million, Verso stated in its quarterly earnings report to the Securities and Exchange Commission. (See excerpt below.) The company’s stock, beaten down by concern about the company’s long-term viability, was worth just over $75 million at the end of the day.

Most of the cost will be for “non-cash” charges to write down the value of Sartell’s plant and equipment. But Verso, North America’s second largest maker of coated paper, estimates it will need cash outlays of about $33 million, most in the current quarter, for severance and other shutdown costs.

“Settlement negotiations regarding this loss claim with our insurance carrier are continuing and we expect resolution in the coming months,” the Verso report said.

7 Reasons the GOP Might Be Starving USPS of Cash

Congressional Republicans seem intent on letting the U.S. Postal Service run out of cash, but even the pundits can't figure out exactly why.

The GOP-controlled House left for summer recess last week after failing to vote on two postal-reform bills that have been languishing for months -- a bipartisan Senate measure and a more conservative alternative developed by a Republican-controlled House committee. Republican leaders in the House refused to say why they have failed to bring either bill up for votes, but here are a few of the choicest theories:

• Fear: House Speaker John Boehner is perhaps "afraid voters would blame his members for the closing of underused post offices," wrote Gail Collins, an op-ed columnist for The New York Times. "There is nothing Congress cares more about than post offices, 38 of which the House has passed bills to rename over the past 18 months."
• Avoiding embarrassment: "Most likely, there's not enough support in the House to pass any bill, so holding a vote would be an embarrassing setback for the GOP leadership," speculates Rick Newman of U.S. News & World Report.
• Let's get closer to the cliff before we hit the brakes: Citing Republican sources, Bernie Becker of The Hill provided this amazing, and truly disgusting, reason: "Lawmakers don't know exactly when the Postal Service might hit a doomsday date when they wouldn't be able to deliver the mail.” Some Congressmen have criticized USPS for not stating exactly when it will go belly up, he wrote. They want to know whether a real crisis can be avoided in the next few months, which "could give the House even less incentive to bring the bill to the floor before their members face voters in November." 

Soft Market, Digital Investments Drag Time Inc. Down

Time Inc.'s magazines are facing such "soft market conditions" that their estimated value may decline significantly this year, the company revealed in a financial statement yesterday.

The country's largest magazine publisher began 2012 with an estimated fair market value 19% higher than its book value, parent Time Warner stated in its quarterly 10-Q financial report.

"During 2012, the Publishing segment has experienced soft market conditions that have negatively impacted its operating results. If those market conditions worsen, it is possible that the book values of the Time Inc. reporting unit and certain of its tradenames will exceed their respective fair values, which may result in the Company recognizing a noncash impairment that could be material."

Decreased sales of both ad pages and newsstand copies dragged the publishing unit's first-half operating income down 60% from last year.