E. Emergency Preparedness Funding

The September 11, 2001, terrorist attacks on the World Trade Center damaged and destroyed Postal Service facilities and property in the contiguous area. In October 2001, well-publicized incidents of biological terrorism targeted U. S. senators and members of the media and also affected other untargeted persons. Because infectious biological agents were sent by mail in these attacks, the Postal Service was directly and severely affected. Two Postal Service employees died of anthrax infection. Mail services in some areas were curtailed; two mail processing facilities had to be closed for the long-term because of anthrax contamination; and overall mail volume declined in 2002 and 2003.

The Postal Service’s viability and its value to the American people depend upon an open and accessible mail system. Following the anthrax attacks, it was critical that the Postal Service enhance the safety of the mail system and reduce risks to both employees and customers. To accomplish those ends, the Postal Service implemented new and enhanced technology applications and process changes.

Shortly after the initial bioterrorist attacks, the President of the United States authorized initial funding of $175 million to assist in paying for these safety measures. In November 2001, Congress appropriated an additional $500 million to "protect postal employees and postal customers from exposure to biohazardous material, to sanitize and screen the mail, and to replace or repair postal facilities destroyed or damaged in New York City as a result of the September 11, 2001 terrorist attacks." Postal Service use of the funds provided by this appropriation was contingent on the submission of an emergency preparedness plan to combat the threat of biohazards in the mail.

The Postal Service submitted the required Emergency Preparedness Plan to Congress in March 2002. In August 2002, Congress appropriated an additional $87 million for emergency expenses, as detailed in the Postal Service’s Emergency Preparedness Plan.

In September 2005, as part of the Consolidated Appropriations Act, 2005 (P.L. 108–447), Congress appropriated $503 million to protect Postal Service employees and customers from exposure to hazardous materials in the mail and to build an irradiation facility. All emergency preparedness funding remains available until expended.

The Postal Service initially recorded this $1,265 million in federal funding as a liability. This liability is reduced as
qualifying expenses are incurred and offsets depreciation expense over the life of capital equipment acquired.

*In 2003 the comprehensive statement showed a balance of $545 million. However, $38 million was spent on irradiation equipment that did not meet the needs of the Postal Service. With the approval of the Office of Management and Budget, the eight machines, valued at $24 million, were transferred to other government and public agencies, and the manufacturer provided the Postal Service with a stronger machine at no additional cost. This new machine is valued at $14 million.

**The liability of $772 million as of 9/30/05 relates to $486 million of capital equipment that has been purchased but not yet depreciated and $286 million for which purchase commitments have been made.