Postal Service to Cut
Saturday Mail
ABC OTUS News – 7 hrs ago
The financially struggling
U.S. Postal Service said Wednesday it will stop delivering mail on Saturdays
but continue to disburse packages six days a week, an apparent end-run around
an unaccommodating Congress.
The service expects the
Saturday mail cutback to begin the week of Aug. 5 and to save about $2 billion
annually, said Postmaster General and CEO Patrick R. Donahoe.
"Our financial
condition is urgent," Donahoe told a press conference.
The move accentuates one
of the agency's strong points — package delivery has increased by 14 percent
since 2010, officials say, while the delivery of letters and other mail has
declined with the increasing use of email and other Internet services.
Under the new plan, mail
would be delivered to homes and businesses only from Monday through Friday, but
would still be delivered to post office boxes on Saturdays. Post offices now
open on Saturdays would remain open on Saturdays.
Over the past several
years, the Postal Service has advocated shifting to a five-day delivery schedule
for mail and packages — and it repeatedly but unsuccessfully appealed to
Congress to approve the move. Though an independent agency, the service gets no
tax dollars for its day-to-day operations but is subject to congressional
control.
Congress has included a
ban on five-day delivery in its appropriations bill. But because the federal
government is now operating under a temporary spending measure, rather than an
appropriations bill, Donahoe says it's the agency's interpretation that it can
make the change itself.
"This is not like a
'gotcha' or anything like that," he said. The agency is essentially asking
Congress not to reimpose the ban when the spending measure expires on March 27
and he said he would work with Congress on the issue.
The agency clearly thinks
it has a majority of the American public on its side regarding the change.
Postal Service market
research and other research indicated that nearly 7 in 10 Americans support the
switch to five-day delivery as a way for the Postal Service to reduce costs,
the agency said.
"The Postal Service
is advancing an important new approach to delivery that reflects the strong
growth of our package business and responds to the financial realities
resulting from America's changing mailing habits," Donahoe said. "We
developed this approach by working with our customers to understand their
delivery needs and by identifying creative ways to generate significant cost
savings."
But the president of the
National Association of Letter Carriers, Fredric Rolando, said the end of
Saturday mail delivery is "a disastrous idea that would have a profoundly
negative effect on the Postal Service and on millions of customers,"
particularly businesses, rural communities, the elderly, the disabled and
others who depend on Saturday delivery for commerce and communication.
He said the maneuver by
Donahoe to make the change "flouts the will of Congress, as expressed
annually over the past 30 years in legislation that mandates six-day
delivery."
House Oversight and
Government Reform Committee Chairman Darrell Issa, R-Calif., and Senate
Homeland Security and Governmental Affairs Ranking Member Tom Coburn M.D.,
R-Okla., said in a joint statement that they had sent a letter to leaders of
the House and Senate in support of the elimination of Saturday mail.
They called it
"common-sense reform"
Others agreed the Postal
Service had little choice.
"If the Congress of
the United States refuses to take action to save the U.S. Postal Service, then
the Postal Service will have to take action on its own," said corporate
communications expert James S. O'Rourke, professor of management at the
University of Notre Dame.
He said other action will
be needed as well, such as shuttering smaller rural post offices and
restructuring employee health care and pension costs.
"It's unclear whether
the USPS has the legislative authority to take such actions on its own, but the
alternative is the status quo until it is completely cash starved,"
O'Rourke said in a statement.
The Postal Service made
the announcement Wednesday, more than six months before the switch, to give
residential and business customers time to plan and adjust, officials said.
Donahoe said the change
would mean a combination of employee reassignment and attrition and is expected
to achieve cost savings of approximately $2 billion annually when fully
implemented.
The agency in November
reported an annual loss of a record $15.9 billion for the last budget year and
forecast more red ink in 2013, capping a tumultuous year in which it was forced
to default on billions in retiree health benefit prepayments to avert
bankruptcy.
The financial losses for
the fiscal year ending Sept. 30 were more than triple the $5.1 billion loss in
the previous year. Having reached its borrowing limit, the mail agency is operating
with little cash on hand.
The agency's biggest
problem — and the majority of the red ink in 2012 — was not due to reduced mail
flow but rather to mounting mandatory costs for future retiree health benefits,
which made up $11.1 billion of the losses. Without that and other related labor
expenses, the mail agency sustained an operating loss of $2.4 billion, lower
than the previous year.
The health payments are a
requirement imposed by Congress in 2006 that the post office set aside $55
billion in an account to cover future medical costs for retirees. The idea was
to put $5.5 billion a year into the account for 10 years. That's $5.5 billion
the post office doesn't have.
No other government agency
is required to make such a payment for future medical benefits. Postal
authorities wanted Congress to address the issue last year, but lawmakers
finished their session without getting it done. So officials are moving ahead
to accelerate their own plan for cost-cutting.
The Postal Service is in
the midst of a major restructuring throughout its retail, delivery and mail
processing operations. Since 2006, it has cut annual costs by about $15
billion, reduced the size of its career workforce by 193,000 or by 28 percent,
and has consolidated more than 200 mail processing locations, officials say.
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