Story highlights The U.S. Postal Service is bleeding money and heading toward insolvency

John Avlon: Congress can save the postal service in deal on the fiscal cliff

He says the urgency is clear, let's hope for a Christmas miracle

Avlon: But be prepared that Washington dysfunction can doom the postal service

It's the time of year for dashing through the snow to the crowded post office, with arms full of holiday gifts for family and friends.

Not to break the atmosphere of holiday cheer, but this Christmas could be the last for the U.S. Postal Service. It is losing $25 million dollars a day and staring down insolvency -- unless Congress steps in to pass a reform package that reduces its costs.

With just a few days left in the congressional calendar, there is still some small hope for a Christmas miracle -- maybe the Postal Service can be saved as part of a deal on the fiscal cliff. But with even Hurricane Sandy relief stalled, skepticism is growing.

The real question is, what's taken them so long? After all, back in April the Senate passed an imperfect but bipartisan bill by 62-37 . It would have saved some $20 billion, cut some 100 distribution centers, and reduced head count by an additional 100,000 through incentives for early retirement, while reducing red tape to encourage entrepreneurialism and keeping Saturday delivery in place for at least another two years. At the time, Sen. Tom Carper of Delaware said, "The situation is not hopeless; the situation is dire. My hope is that our friends over in the U.S. House, given the bipartisan steps we took this week, will feel a sense of urgency."

John Avlon

To which the House might as well have replied, "Not so much."

In August, the Postal Service defaulted for the first time, unable to make a $5.5 billion payment to fund future retirees' health benefits. The headline in Government Executive magazine said it all: "Postal Service defaults, Congress does nothing."

The usual suspects were at fault -- hyperpartisan politics and the ideological arrogance that always makes the perfect the enemy of the good.

House Oversight Committee Chairman Darrell Issa greeted the news of the Senate bill by calling it a "taxpayer-funded bailout." His primary complaint was that the Senate bill did not go far enough. He was not alone -- Postmaster General Patrick Donahoe also expressed disappointment at the scope of the Senate bill, saying that it fell "far short of the Postal Service's plan."

But Issa's alternative couldn't even get to a vote in the Republican-controlled House. And so nothing happened. Even after the USPS defaulted on a second $5.5 billion payment, the response was crickets.

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Washington insiders said that action would be taken after the election, when lawmakers would be free to make potentially unpopular decisions. But despite a series of closed-door meetings, nothing has been done.

It's possible that the nearly $20 billion in savings could be part of a fiscal cliff deal. Sen. Joseph Lieberman has suggested that ending Saturday delivery, except for packages, could be part of a compromise that could save big bucks down the road. Another aspect of a savings plan could be suspending the USPS' onerous obligation to fully fund its pension costs upfront, a requirement that would push many businesses into bankruptcy. And last fiscal year, the post office posted a record $15.9 billion loss.

"As the nation creeps toward the 'fiscal cliff,' the U.S. Postal Service is clearly marching toward a financial collapse of its own," says Carper. "The Postal Service's financial crisis is growing worse, not better. It is imperative that Congress get to work on this issue and find a solution immediately. ... Recently key House and Senate leaders on postal reform have had productive discussions on a path forward, and while there may be some differences of opinion in some of the policy approaches needed to save the Postal Service, there is broad agreement that reform needs to happen -- the sooner the better."

The urgency couldn't be clearer -- but even at this yuletide 11th hour, signs of progress are slim to none. If Congress fails to pass a bill, we'll be back to square one in the new year, with the Senate needing to pass a new bill which will then have to be ratified by the House. There is just no rational reason to think that lift will be any easier in the next Congress than in the current lame duck Congress, where our elected officials are supposedly more free to do the right thing, freed from electoral consequences.

So as you crowd your local post office this holiday season, look around and realize that the clock is ticking. The Postal Service is fighting for its life. And Congress seems determined to ignore its cries for help.

"Neither rain nor snow nor sleet nor gloom of night" can stop the U.S. Postal Service from making its appointed rounds -- but congressional division and dysfunction apparently can.

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