Congress thwarts five-day postal service plan

The agency lost $15.9 billion last year.
The U.S. Postal Service announced that it is no longer planning on suspending Saturday mail service after pressure from Congress. Sen. Claire McCaskill, D-Mo., approved of the Postal Service's change of heart.

Saturday mail service will continue after a congressional budget resolution blocked the U.S. Postal Service's call to switch to a five-day delivery week.

In February, the Postal Service, which lost $15.9 billion last year, proposed cutting Saturday mail deliveries starting in August. The move would have saved the agency an estimated $2 billion each year.

In a statement Wednesday, the Postal Service Board of Governors said Congress' continuing resolution, which will fund the government through the remainder of 2013 and demanded that the Postal Service keep six-day deliveries, left the Postal Service with its hands tied.

"The Board believes that Congress has left it with no choice but to delay this implementation at this time," the board said in a statement.

Since 1983, congressional budgets have included a provision mandating six-day delivery.

Sen. Claire McCaskill, D-Mo., who fought the five-day delivery proposal, praised the Postal Service for continuing six-day deliveries.

"The decision by the Postal Service to scrap their hurried, ill-considered plan to eliminate Saturday delivery is the right one, especially for communities across rural America for whom reliable postal service is so important," McCaskill said in a news release.

McCaskill said Congress would work to pass legislation that would reform the Postal Service and alleviate its financial woes. Last year, the Senate approved a postal reform bill, but it failed to reach the floor of the U.S. House of Representatives.

"We passed a good bipartisan bill that would have addressed this," McCaskill said last month. "It would have prevented the closing of rural post offices, it would have prevented going to five-day delivery, and like so many other things, the House Republicans wouldn't vote on it. It's like a lot of other bills — I think if they put it on the floor it would pass."

In February, Postmaster General Patrick Donahoe testified before the Senate Committee on Homeland Security, urging the Senate to enact another reform bill.

"Time is of the essence, and each day that passes without enacted postal reform further impacts the Postal Service’s already dire financial condition," Donahoe said. "The Postal Service is losing $25 million per day."

Donahoe said Postal Service losses for 2013 may reach $20 billion.

McCaskill said she is worried Donahoe is overstating the Postal Service's financial struggles.

"As a former auditor, I want to see where he believes those savings are coming from," McCaskill said. "I do believe in the long run this could be a death spiral for the Postal Service in terms of competitiveness, and I don't want to give up the finest universal delivery system of mail that the world has ever known."

A large chunk of the Postal Service's losses come from Congress' requirement that the agency fund health care and pensions for its employees for 75 years. No other private or public-sector job has such stringent requirements, McCaskill said.

Donahoe said 20 cents on every revenue dollar the Postal Service earns goes toward employees' health care, a figure he called "astonishing."

The Board said that in the absence of a five-day delivery, it will have to consider bargaining with unions and increasing prices to remain financially solvent.

"Delaying responsible changes to the Postal Service business model only increases the potential that the Postal Service may become a burden to the American taxpayer, which is avoidable," the Board said.

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