WASHINGTON — Leaders of the U.S. Postal Service said Tuesday the nation's besieged mail system will ask Congress for an emergency, multibillion dollar bailout to cover operating losses and added security costs arising from the anthrax attacks.
The bailout request will be modeled after the $5 billion rescue package that Congress provided the nation's airline industry after the Sept. 11 attacks on the World Trade Center and the Pentagon.
The announcement came as authorities described progress handling the aftermath of anthrax attacks in Florida, New York, New Jersey and Washington, D.C., that have inflected 17 people and claimed four lives nationwide since Oct. 5. The progress on the cleanup contrasted to authorities' admission that they have not identified the source of the mailed anthrax despite offering a $1 million reward for information that has generated more than 300 tips.
Postal officials said:
— Delivery would resume within 48 hours for some mail addressed to members of Congress and federal agencies initially processed by the anthrax-contaminated Brentwood processing office in Washington. The mail has been returned to the nation's capital for distribution after being irradiated against contamination by a firm in Lima, Ohio, processing 750,000 pieces of mail each day.
— The Postal Service announced a 90-day, $2.4 million contract with a second facility in Bridgeport, N.J., to irradiate mail, enabling postal workers to end a screening backlog and keep pace with mail moving through the New York-to-Washington corridor.
— In New York, health officials reopened the Manhattan Eye, Ear and Throat Hospital that had been shut down for six days after Kathy Nguyen, 61, a hospital worker, contracted inhalation anthrax. She later died of the disease.
Azeezaly S. Jaffer, vice president of public affairs for the Postal Service, said he was "encouraged" by progress in cleaning up from the anthrax attacks.
Gradual restoration of normal deliveries in Washington, New Jersey and New York City and safety precautions in other areas have helped to "maintain confidence in the mail by the American people," Jaffer told reporters.
Officials said Postmaster General Jack Potter would outline the request for financial help on Thursday in an appearance before the Senate Appropriations Committee panel that has jurisdiction over the Postal Service. The Postal Service, a $68 billion-a-year government-owned monopoly, has been afflicted with chronic financial problems for years.
Robert Rider, chairman of the Postal Service Board of Governors, said the theoretically self-financing Postal Service now faced "extraordinary expenditures" to deal with the consequences of the mailed anthrax that infected seven postal workers, killing two. The Postal Service already faced a projected $1.4 billion loss before the Sept. 11 attacks but now faces the double burden of additional security costs and unanticipated losses from reduced mail volume.
Additional costs stem from testing 267 postal facilities, screening 8,800 employees and providing precautionary antibiotics to 16,000 workers. The Postal Service also is providing 88 million gloves, 4.8 million face masks and flu shots for all 800,000 employees, in addition to cleaning up nine contaminated sites and buying enough $5 million irradiating machines to cleanse some of the 638 million pieces of mail delivered each day to 135 million addresses.
Revenue losses amounted to $800 million in the first eight weeks since the Sept. 11 attacks, with more losses projected through the remainder of the year, according to chief financial officer Richard Strasser Jr.
The added costs and lost revenue could not be made up by cost cutting elsewhere or revenue from a pending 3 cent hike in the 34 cent first class stamp formally requested on the same day as the Sept. 11 attacks.
"We strongly believe that these costs should not be borne by our customers through increased rates," Rider told a meeting of the Postal Service's board of governors. "Because these costs were incurred as a result of terrorist acts directed against our nation, we believe they should be appropriately considered along with the other costs of homeland security."
Strasser told the board of governors that the USPS request to Congress would resemble the airline industry bailout passed by Congress and signed into law by President Bush just 11 days after the Sept. 11 attacks.
That legislation provided a $5 billion account for airlines to draw upon for proven direct losses stemming from the five-day nationwide shutdown of air service and reduced air service afterwards plus $10 billion in loan guarantees.
Postal officials only hinted at the size of the planned Postal Service bail out request, citing a pending request for $2.5 billion in added security costs and contending that lost revenues would be less than $7 billion.
Strasser said the projected price tag for unforeseen costs and lost revenue would be in the "billions of dollars."
"The airline model is probably one that the Congress would be wise to think about," Strasser said. Congress would "set some figure" for the bailout account to enable the Postal Service to be "reimbursed for (losses) actually incurred as opposed to just funding essentially a blank check."
Senior postal officials began pitching their case by portraying the Postal Service's projected acquisition of multibillion dollar sanitizing equipment as a cost saving measure for the entire federal government.
"It would be wrong for each federal agency to buy equipment to sanitize mail individually when you have the U.S. Postal Service collection, delivery and processing," said Jaffer. "We see this is as a one-time expense that has occurred here. What we're dealing with here is a homeland security issue."
The Postal Service continues to be plagued by costly hoaxes, with 10,000 false reports of anthrax or explosives — averaging 600 a day — forcing the temporary shutdown of more than 300 of the nation's 40,000 postal facilitates.