Obama's Postal Service plan would cut Saturday mail

WASHINGTON (Reuters) - The Obama administration's plan to rescue the U.S. Postal Service would allow the agency to end Saturday mail delivery and sell non-postal products, according to documents released on Monday.

The plan, introduced alongside a deficit-reduction package, also would restructure a massive annual payment to prefund retiree health benefits and refund $6.9 billion the mail carrier says it overpaid into a federal retirement fund.

The White House says its plan would save the Postal Service more than $20 billion in the next few years.

"The administration recognizes the enormous value of the U.S. Postal Service to the nation's commerce and communications, as well as the urgent need for reform to ensure its future viability," the White House document said.

The Postal Service has watched its core business of delivering mail erode as consumers send email and pay bills online. The agency has said it needs to downsize drastically or it will be unable to deliver mail by the end of next summer.

The agency has said it needs to reduce payrolls by about 220,000 by 2015 and is studying thousands of post offices and about 300 processing facilities for possible closure.

Analysts have said the move to five-day mail delivery could hurt e-commerce businesses that rely on the Postal Service to carry their products to consumers.

Shares of eBay Inc fell more than 6 percent this month on concerns that proposed cuts could raise costs for the site's small sellers.

The Postal Service contends that weekend mail traffic is too light to support Saturday delivery.

"The president's proposal would help the Postal Service update its business model to reflect Americans' changing communications habits," said Senator Tom Carper, a Democrat.

Many lawmakers in Congress back five-day mail delivery, but little consensus has emerged on how to overhaul the agency. Republican Darrell Issa has refused to consider revamping the prepayment or returning retirement fund money, which the White House plan and several Democratic lawmakers' bills would do.

Issa, chairman of the House of Representatives Oversight Committee, offered an amendment on Monday that he says brings the savings in his USPS bill to more than $10 billion per year through cuts and restructuring.

His bill would end Saturday mail and set up groups to close facilities and cut costs if the agency misses payments. The amendment doubles the amount the agency would have to save by closing processing facilities and phases out delivery to front-door mail slots.

Issa's plan, which allows USPS to override contracts and cut the workforce, could spark arguments in Congress when a subcommittee takes up the bill on Wednesday.

Obama administration officials said their plan supports retirement incentives but not layoffs, which postal unions and many Democratic lawmakers fiercely oppose.

The Postal Service relies on revenue from stamps, packages and other services, not tax dollars, to fund its operations. The agency lost more than $3 billion last quarter.

The agency expects to default on the $5.5 billion retiree health payment due at the end of September unless Congress provides relief. Lawmakers have indicated they want to extend the due date for the payment.

(Editing by Doina Chiacu)

1,516 comments

  • the coop about an hour ago
    Last quarter the post office lost 3.9 billion ,now the post office over paid retirement funds 6.9 billion,which theses congressmen do not want to pay back.now are they trying to help the post to go broke quicker and saying we will help you.now the money they stole from social security that will not be paid back either,and that was over 1 trillion dollars,thats why they have to make cuts in social security or fevamp.congress is the ones that has the power to do these things.what did they do with all that money?
  • Jim 2 hours ago
    One thing I haven't seen yet is that Congress needs to start paying for all the mail they send. Right now Congrespeople can send all the mail they want to free. Make them start paying.
  • rationalthinker 2 hours ago
    From my experience they need to get rid of the numerous useless do-nothing managers in the branches, figure out that having people go to lunch because their union contract says they go at this hour when there are 25 people in line and only one other window open and make it possible to cut staff without the union getting it's panties in a wad. The Post Office performs a valuable service for a lot of us - I sell items by mail - but it's getting harder and harder to deal with lines, rude clerks, know nothing managers and steadily rising fees for everything. Run it like a business or shut it down ...
  • TJ 38 minutes ago
    If junk mail was illegal, the USPS could cut its workforce in half and save billions of trees at the same time!
  • baby boomer about an hour ago
    If the federal government had not taken 5 Billion dollars out for the U.S. Postal system each year--just like they raped the social security funds--this would not be happening---It is criminal-----
  • david 2 hours ago
    oh boy here we go AGAIN in congress with 2 parties bickering about their plan is the best!!!! what a bunch of overpaid lazy morons!
  • Tom about an hour ago
    It is so easy to hate on the USPS but what you all seem to forget is that for many Americans it is a reliable and efficient agency that people trust.
  • fifdcent about an hour ago
    Please cut delivery back to every other day, six days a week. That would cut the USPS by 50%. And my junk mail will only be thrown out every other day, instead of 6 days a week.
  • Kevin 28 minutes ago
    This is just obvious. Very few important things are mailed these days anyway, and if you still get something important in the mail, waiting until Monday for it to arrive (if it normally came Saturday) shouldn't be the end of the world. A retiree who's still getting SS checks in the mail should switch to direct deposit anyway. Also, in most countries, mail service is either much more expensive, much less frequent, or both. Personally, I think for residential delivery, every other day would be fine. Most people in my neighborhood (where we have a set of boxes for about 50 houses in the subdivision placed at various spots) only go get their mail every few days anyway, since it isn't delivered right to their house.
  • Doc Holiday 35 minutes ago
    cut free postage for congress...if we have to budget, so should they !
  • Korben Dallas 46 minutes ago
    Simple economics 101 - Supply and demand. If there is a decrease in the demand for the product then one way to cut costs is to reduce labor costs. So deleting Saturday delivery makes sense to me. Maybe the USPS should figure out a way to compete in the 21st century electronic and online field somehow. I don't really use the postal service much anymore either. I pay my bills online and my business sends out bills via email. We are saving a ton in costs of postage, envelopes, and time, thus increasing productivity. This reminds me of the early 20th century when automobiles began to replace horse drawn carriages. It's progress.
  • Patrick W 2 hours ago
    My neighbor works for the post office. he is a temporary carrier for the last 3 years. he works very hard because he is that kind of person walking in the wisconsin winter's delivering the mail.
  • Peter Parker 2 hours ago
    Many proposals the post office would like to proceed with gets stalled in Congress for years. These changes were proposed years ago but the government waits till the last minute to allow the changes.
  • ntex 37 minutes ago
    What non-postal products are they contemplating selling?
  • cameron m 42 minutes ago
    e-commerce will just have to cope like all of us. the postal service needs to be selfsupporting. in every way including pensions and benefits for workers.
  • ripm about an hour ago
    The USPS is a typical bloated government bureacracy. Want one example? I live in a small one horse town. The local part time postmaster, who does everything the full timer does when the FT is not on duty, lives right across the street from the post office and has held this job for over 15 years.The FT retired some years ago so move the local PM into the job, right? Nope.The USPS sent a PM from Tulsa to operate it; for over 2 years/5 days a week.The round trip for this PM was 250 miles a day.The Tulsa PM was reimbursed by the USPS at 45 cents a miles + 10 bucks a day turnpike fees during this entire time.Do the math on that. The USPS efficient? Only in the eyes of a government or USPS employee. In the real world it's #$%$ that a private company would not tolerate for one second.I won't even get into the PM in neighbor town who was opening people's mail .(including my bank statements as it rurned out along with everyone else's).Fire her? Nope. They moved her to another neighbor town instead.There's a dedicated USPS employee who is currently drawing a pension after recently retiring.
  • Stateless Infidel about an hour ago
    "Why not increase rates on all the crap mail we get and throw away every day ... pass it on over to the wasteful advertisements that go straight to the recycle bin." Ditto - But the politicians won't do that because of the political advertisements sent through the mail. And my postman told me that without this gigantic waste of paper the Post Office would go under. Drop Saturday mail? I didn't know we still had it!
  • StreetHockeyGod about an hour ago
    Darrell issa....isnt this guy a convicted felon???
  • 3.14159 2 hours ago
    Our mail for a typical day, one credit card application, one catalog for winter clothing, and one college letter asking our daughter to apply. the letters find the shredder and the catalog goes in the trash.
  • Douglas 3 hours ago
    Postal employees will get paid just as much, will still have the sweet pensions and health benefits... and they will have another day off.Instead of getting rid of Saturday hours, which is often the only time I can get to a post office... even with the limited #$%$ hours... lets get rid of Tues / Thursday post office hours / delivery.That way we can save the Post office at least 40 billion, still allow for convenience of a weekend delivery / hours
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