Will Saturday cuts save the Postal Service?
Postmaster General Patrick R. Donahoe announced plans to reduce Saturday deliveries beginning in August. The Postal Service says the changes will save $2 billion annually. Though The Postal Service lost $15.9 billion last fiscal year, some in Congress and elsewhere oppose the Saturday cutbacks.
WASHINGTON — Saturday mail may soon go the way of the Pony Express and penny postcards. The Postal Service said Wednesday that it plans to cut back to five-day-a-week deliveries for everything except packages to stem its financial losses in a world radically re-ordered by the Internet.
"Our financial condition is urgent," declared Postmaster General Patrick R. Donahoe. But Congress has voted in the past to bar the idea of eliminating Saturday delivery, and his announcement immediately drew protests from some lawmakers. The plan, which is to take effect in August, also brought vigorous objections from farmers, the letter carriers' union and others.
The Postal Service, which suffered a $15.9 billion loss in the past budget year, said it expected to save $2 billion annually with the Saturday cutback. Mail such as letters and magazines would be affected. Delivery of packages of all sizes would continue six days a week.
The plan 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 plummeted. Email has decreased the mailing of paper letters, but online purchases have increased package shipping, forcing the Postal Service to adjust to customers' new habits.
"Things change," Donahoe said.
"The mail isn't that important to me anymore. I don't sit around waiting for it to come. It's a sign of the times," he said, adding, "It's not like anyone writes letters anymore."
In fact, the Postal Service has had to adapt to changing times ever since Benjamin Franklin was appointed the first postmaster general by the Continental Congress in 1775. The Pony Express began in 1860, six-day delivery started in 1863, and airmail became the mode in 1918. Twice-a-day delivery was cut to one in 1950 to save money.
But change is not the biggest factor in the agency's predicament — Congress is. The majority of the service's red ink comes from a 2006 law forcing it to pay about $5.5 billion a year into future retiree health benefits, something no other agency does. Without that payment — $11.1 billion in a two-year installment last year — and related labor expenses, the mail agency sustained an operating loss of $2.4 billion for the past fiscal year, lower than the previous year.
Congress also has stymied the service's efforts to close some post offices in small towns.
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.
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 has appealed to Congress to approve the move. An independent agency, the service gets no tax dollars for its day-to-day operations but is subject to congressional control.
The proposed change is based on what appears to be a legal loophole — and that may be a gamble. Congress has long included a ban on five-day-only delivery in its spending bills, 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 essentially wants Congress to keep the ban out of any new spending bill after the temporary measure expires March 27.
Might Congress try to block the idea?
"Let's see what happens," he said. "I can't speak for Congress."
Two Republican lawmakers said they had sent a letter to leaders of the House and Senate in support of the elimination of Saturday mail. It's "common-sense reform," wrote Darrell Issa of California, chairman of the House Oversight and Government Reform Committee, and Tom Coburn of Oklahoma, top Republican on the Senate Homeland Security and Governmental Affairs Committee.
But Alaska Democratic Sen. Mark Begich called it "bad news for Alaskans and small business owners" who he said need timely delivery to rural areas.
Sen. Susan Collins, R-Maine, said she was disappointed, questioned the savings estimate and worried the loss of Saturday service might drive customers away.
"The Postal Service is the linchpin of a $1 trillion mailing and mail-related industry that employs more than 8 million Americans in fields as diverse as direct mail, printing, catalog companies, magazine and newspaper publishing and paper manufacturing," she said. "A healthy Postal Service is not just important to postal customers but also to our national economy."
She noted that the Senate last year passed a bill that would have stopped the postal service from eliminating Saturday service for at least two years and required it to try two years of aggressive cost cutting instead.
The House didn't pass a bill.
Republican House Speaker John Boehner said Wednesday, "I think trying to act in this postal area is pretty difficult. But I understand where the postal commission is coming from. They're in charge with running thepost office, but yet the Congress, in its wisdom, has tied their hands every which way in order for them to actually run the post office in a revenue neutral way."
"And so Congress needs to act, there's no question about that, and I hope we'll act soon."
President Barack Obama's spokesman, Jay Carney, said the White House learned only Tuesday about the agency's decision to cut Saturday service. He said the White House is still evaluating the decision but would have preferred its own comprehensive overhaul package that failed to pass Congress last year be adopted "for the sake of a stronger future Postal Service."
The president of the National Association of Letter Carriers, Fredric Rolando, said the cutback 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."
Despite that opposition, the Postal Service clearly thinks it has a majority of the American public on its side. The service's market research indicates that nearly 7 in 10 people support the switch as a way to reduce costs, Donahoe said.
He said the savings would include employee reassignment and attrition.
The agency in November reported a record annual loss of $15.9 billion for the past budget year and forecast more red ink in 2013, capping a tumultuous year in which it was forced to default on the $11 billion 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 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 28 percent, and has consolidated more than 200 mail processing locations, officials say.
At the DeCicco Food Market in Pelham, N.Y., where they handle the mail for all 10 of their stores, the assistant manager, Frank Torres, said they will try to adjust their routine. I'll tell you, though, the customers are pretty upset, we've been hearing them at the (checkout) registers. Some of them get mail they want on Saturday.
"You know what also, it will be strange not seeing the mailman on Saturday. Our office girls know him on a first-name basis."
Associated Press writers David Koenig in Dallas; Jim Fitzgerald in White Plains, N.Y.; John Seewer in Toledo, Ohio; Nedra Pickler and Jerry Bodlander and researcher Monika Mathur in Washington contributed to this report.