Postal Service Backs Down on Sat. Mail
The financially beleaguered Postal Service
backpedaled on its plan to end Saturday mail delivery, conceding
Wednesday that its gamble to compel congressional approval had failed.
With
limited options for saving money, the governing board said the agency
should reopen negotiations with unions to lower labor costs and consider
raising mail prices.
Yet the board also said it's not possible for the Postal Service to meet its goals for reduced spending without altering the delivery schedule.
Delaying "responsible changes," the board said, only makes it more
likely that the Postal Service "may become a burden" to taxpayers.
Congressional
reaction was mixed, mirroring differences that have stalled a needed
postal overhaul for some time. Some lawmakers had urged the agency to
forge ahead with its plan, while others had said it lacked the legal
authority to do so.
The Postal Service said in February that
it planned to switch to five-day-a-week deliveries beginning in August
for everything except packages as a way to hold down losses.
That announcement was risky. The agency was asking Congress to drop from spending legislation the longtime ban on five-day-only delivery.
Congress did not do that when it passed a spending measure last month.
"By
including restrictive language ... Congress has prohibited
implementation of a new national delivery schedule for mail and
package," according to the board.
Disappointed but not
wanting to disregard the law, the board directed the Postal Service to
delay putting in place the new delivery schedule until Congress passes
legislation that gives the agency "the authority to implement a
financially appropriate and responsible delivery schedule."
The board made the decision in a closed meeting Tuesday.
"This
is good news for rural communities, businesses, seniors, veterans and
others who depend on consistent and timely delivery of the mail," said
Sen. Bernie Sanders, I-Vt.
But GOP Rep. Darrell Issa of
California, chairman of the House Oversight and Government Reform
Committee, bemoaned the decision to back away from a "delivery schedule
that polling indicates the American people understand and support."
Postal
officials said that to restore the service to long-term financial
stability, the agency must have the flexibility to reduce costs and come
up with new revenues.
"It is not possible for the Postal
Service to meet significant cost reduction goals without changing its
delivery schedule — any rational analysis of our current financial
condition and business options leads to this conclusion," the board
statement said.
An independent agency, the service gets no
tax dollars for its day-to-day operations but is subject to
congressional control. It lost nearly $16 billion last year — $11.1
billion of that due to a 2006 law Congress passed forcing it to pay into
future retiree health benefits, something no other agency does.
"Given
these extreme circumstances and the worsening financial condition of
the Postal Service, the board has directed management to seek a
reopening of negotiations with the postal unions and consultations with
management associations to lower total workforce costs, and to take
administrative actions necessary to reduce costs," according to the
statement. It offered no giving further details.
It said the board also asked management to look at further options to raise revenues, including a rate increase.
Fredric
Rolando, president of the National Association of Letter Carriers,
scoffed at the idea of renegotiating labor contracts, saying that
suggestion "is yet another sign that the Postal Service needs new
executive leadership."
He also contended that ending Saturday
delivery would cut mail volume and revenue, and send the Postal Service
"on a death spiral."
The Postal Service already is executing
a major restructuring throughout its retail, delivery and mail
processing operations. Since 2006, it has reduced annual costs by
approximately $15 billion, cut its workforce by 193,000 or 28 percent,
and consolidated more than 200 mail processing locations.
The
idea to cut Saturday mail but keep six-day package delivery — a plan
Postmaster General Patrick Donahoe estimated could save $2 billion —
played up the agency's strong point.
Its package service is
growing as more people buy things online, while the volume of letters
sent has slumped with increased use of email and other internet
services.
Over the past several years, the Postal Service
also has advocated shifting to a five-day delivery schedule for mail and
packages. It repeatedly but unsuccessfully appealed to Congress to
approve the move and to free it from the advance health payments.
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.
In dire straits, the agency acted on its own on the Saturday issue.
Issa
said the reversal "significantly undercuts the credibility of postal
officials who have told Congress that they were prepared defy political
pressure and make difficult but necessary cuts."
Sen. Tom
Carper, D-Del., a leader on postal issues, said he hoped Congress would
pass new legislation to address the agency's problems.
President
Barack Obama's budget proposal Wednesday includes the same provision as
last year on the Post Service — a plan to let the agency realign its
business plan to better compete in the changing marketplace.
The
spending blueprint from the budget year that begins Oct. 1 includes a
proposal for short-term financial relief and long-term changes at the
agency that, it says, will result in more than $20 billion in savings
over 10 years.