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 jobs and cost reductions of as much as $2 billion a year, Donahoe said. The job cuts can be made by attribution 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.
Representative Darrell Issa, a California Republican who leads the House Oversight and Government Reform Committee, which oversees post office operations, backed the proposal. Issa and Oklahoma Republican Senator 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.”
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.
President Barack Obama’s budget proposal for fiscal 2013, released last year, called for cutting one day of mail delivery each week.
Join PBN for the best networking event and party of the winter - January 15, 2015 - the Book of Lists Party at the Providence Public Library. Reserve your spot by December 31st and get a holiday gift from PBN!
PBN's annual Book of Lists has been an essential resource for the local business community for almost 30 years. The Book of Lists features a wealth of company rankings from a variety of fields and industries, including banking, health care, real estate, law, hospitality, education, not-for-profits, technology and many more.