The inspector general of the U.S. Postal Service and Republicans in the House of Representatives are targeting $76 million in annual subsidies that lower the cost of shipping goods to Bush Alaska, saying the struggling postal service needs to cut expenses.
Lawmakers from the House Committee on Oversight and Government Reform held a hearing on the program Tuesday entitled “Alaska Bypass Mail Delivery: A Broken System.” The chairman of the committee, California Republican Rep. Darrell Issa, is pushing measures he said would reduce the subsidy and let more air carriers into the program.
Issa said the cost of the subsidy amounts to postal customers buying a giant new bridge for Alaska every six years.
“Every six years the American ratepayer is buying a new bridge to nowhere,” he said.
Members of Alaska’s congressional delegation defended the program during a sometimes contentious hearing. Alaska Republican Rep. Don Young accused Issa of meddling in his state, and said Issa’s plans would backfire and make the program even more expensive for the postal service.
Young said the postal service is $15 billion in debt and Congress should focus on issues other than this $76 million cost.
“That’s what you call picking at peanuts when you have a forest fire in your backyard,” Young said.
The bypass mail system is unique to Alaska. The postal service subsidizes the shipping of pallets of goods and mail to remote rural Alaska villages by commercial air carriers.
Alaska Democratic Sen. Mark Begich said 80 percent of Alaskan communities are off the road system, so groceries and other necessities have to be shipped by mail. The bypass mail system is cheaper than if the postal service had to ship the items itself, he said, and lets Alaskans have universal postal service in the most cost-effective way.
“It’s not broken, despite the title of this committee hearing,” Begich said.
Begich said a bipartisan postal reform bill is moving in the Senate that deals with broader problems faced by the postal service without messing with the Alaska bypass system.
The postal service’s inspector general criticized the Alaska bypass mail system in a 2011 report, saying the program has gone beyond its original purpose and seems to benefit air carriers paid to carry the goods more than anyone else.
Deputy Inspector General Tammy Whitcomb suggested at Tuesday’s hearing that the state of Alaska could reimburse the postal service for its losses. She said the nearly $50 billion Alaska Permanent Fund earned $2.9 billion last year and the money could come from those earnings.
Young criticized the inspector general's report.
“He’s full of it, right up to his eyeballs,” Young told the committee.
The postal service’s Alaska district manager, Ronald Haberman, supported the bypass mail system in his testimony. Haberman said it works well and is the most efficient way to handle the goods headed to rural Alaska. He said the postal service has a mission to provide reliable service to everyone, even if that delivery comes at a loss.
Issa said the system forces America’s postal ratepayers to subsidize a select set of air carriers, and that if nothing else it needs to be opened to competition from other carriers. Begich said letting carriers in that don’t have a solid share of the rural Alaska market would lead to unreliable service and higher costs.