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Nuts & Bolts

February 7, 2013

U.S. Postal Service plans to end Saturday mail deliveries

WASHINGTON — The U.S. Postal Service plans to end Saturday mail delivery as soon as August to cut financial losses, a change Postmaster General Patrick Donahoe said it can make without Congress's approval if necessary.

The service, which lost $15.9 billion last year, said it would continue six-day deliveries of packages, deliver mail to post-office boxes and keep open retail locations that now operate on Saturdays.

 The change would lead to the elimination of 22,500 full- time equivalent jobs and reduce costs by as much as $2 billion a year, Donahoe said. Job cuts can be made by attrition and buyouts, he said at a news conference in Washington.

"We need to generate nearly $20 billion in cost reductions and revenue increases to be able to close our budget gap and repay our debt," Donahoe said at the service's headquarters.

Lawmakers have stifled previous cost-cutting proposals, including efforts to end Saturday mail delivery.

Cutting Saturday delivery is allowed under Congress's continuing resolution funding government operations that expires March 27, Donahoe said.

 "It is our opinion with the way the law is set with the continuing resolution, we can make this change," he said.

House Speaker John Boehner said lawmakers need to have bipartisan conversations about the Postal Service's future and take action.

"Trying to act in this postal area is pretty difficult," the Ohio Republican told reporters Wednesday. "Congress has tied their hands every which way."

The post office's losses have continued to widen and are estimated at $25 million a day. Mail volume is down 26 percent from its 2006 peak. To pay bills and keep the mail moving, the postal service has had to skip $11.1 billion of required payments over the past two years for future retirees' health costs. It exhausted its $15 billion borrowing authority last September.

The service, which has 521,000 career employees, says it will run out of money in October even after ignoring this year's retiree health obligation. If it can't pay workers or buy fuel for trucks, Americans looking for their bills, magazines and catalogs could find empty mailboxes.

Rep. Darrell Issa, a California Republican who leads the House Oversight and Government Reform Committee, which oversees post office operations, backed Wednesday's proposal. Issa included elimination of Saturday delivery in a postal bill that didn't come to a vote in the House last year.

Issa and Oklahoma Republican Sen. Tom Coburn, his party's senior member on the Senate Homeland Security and Governmental Affairs Committee, sent a letter to Congress calling the change to five-day delivery a "common-sense reform" that is "worthy of bipartisan support."

Sen. Tom Carper, a Delaware Democrat who heads the governmental affairs committee, said he's "disappointed" by the Postal Service's move. A Senate measure approved last year would have required the service to study Saturday delivery changes for two years and Carper said he'd prefer that route.

"Despite my disappointment, it's hard to condemn the Postmaster General for moving aggressively to do what he believes he can and must do to keep the lights on at the Postal Service, which may be only months away from insolvency," Carper said in a statement.

President Barack Obama's budget proposal for fiscal 2013, released last year, called for cutting one day of mail delivery each week.

Fredric Rolando, president of the National Association of Letter Carriers union, called the move "disastrous" and said Donahoe should resign or be ousted.

"If the Postmaster General is unwilling or unable to develop a smart growth strategy that serves the nearly 50 percent of business mailers that want to keep six-day service, and if he arrogantly thinks he is above the law or has the right to decide policy matters that should be left to Congress, it is time for him to step down," Rolando said in an emailed statement.

Americans, by an almost 4-1 majority, supported ending Saturday mail delivery in a 2011 national poll of registered voters by Quinnipiac University, in Hamden, Conn.

About 5 percent of the postal service's employees in January accepted a cost-cutting early retirement offer. The service says it has already cut about 60,000 full-time jobs in the past two years.

Donahoe, in a Jan. 3 statement, urged Congress to make postal legislation "an urgent priority."

"We are on an unsustainable financial path," Donahoe said. "The Postal Service should not have to do business this way."

               

 

 

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