Photo Courtesy: Associated Press
John Bacon and Natalie DiBlasio, USA TODAY
The Postal Service today announced plans to end Saturday delivery for first class mail.
Package delivery, which has seen growth in recent years as online purchasing booms, will continue under the plan. Postmaster General Patrick Donahue said.
Donahue, saying the plan will save $2 billion annually, called the decision an "important part of our strategy to return to financial stability."
Last year, Under pressure from Congress and local communities, the cash-strapped agency dropped plans to close thousands of post offices across the nation, instead deciding to trim operations at 13,000 offices.
Saturday has the week's lowest daily volume and and more than a third of U.S. businesses are closed Saturday, USPS reports. Most businesses and households surveyed in a national Gallup Poll indicated Saturday would be the least disruptive day to eliminate mail delivery.
Mail will not be scheduled for collection from blue collection boxes on Saturday. Post Offices now open on Saturdays would remain open under the plan, and mail would be delivered to post office boxes. Deposited mail would be processed on Monday.
The American Postal Workers Union has previously decried the plan.
"People don't want to find out who won the Friday night football game on Monday they want to find out on Saturday," said Sally Davidow, the unions communications director.
USPS has faced billion-dollar deficits since 2007 attributed to a combination of the bad economy, the Internet and mandatory pre-funding of retiree health benefits.
USPS doesn't use a dollar of tax money.
"Our financial crisis is the result of a restrictive business model and a permanent and fundamental shift away from First-Class Mail," Postmaster General Patrick Donahoe said last year.
The agency in November reported an annual loss of a record $15.9 billion for the last budget year. The financial losses for the year, which ended Sept. 30, were more than triple the $5.1 billion loss in the previous year. Last year the agency was forced to default on billions in retiree health benefit prepayments to avert bankruptcy.
The agency's biggest problem - and the majority of the red ink in 2012 - was not due to reduced mail flow but rather to mounting mandatory costs for future retiree health benefits, which made up $11.1 billion of the losses. Without that and other related labor expenses, the mail agency sustained an operating loss of $2.4 billion, lower than the previous year.
The health payments are a requirement imposed by Congress in 2006 that the post office set aside $55 billion in an account to cover future medical costs for retirees. The idea was to put $5.5 billion a year into the account for 10 years. That's $5.5 billion the post office doesn't have.
No other government agency is required to make such a payment for future medical benefits. Postal authorities wanted Congress to address the issue last year, but lawmakers finished their session without getting it done. So officials are moving ahead to accelerate their own plan for cost-cutting.
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 by 28 percent, and has consolidated more than 200 mail processing locations, officials say.
They say that while the change in the delivery schedule announced Wednesday is one of the actions needed to restore the financial health of the service, they still urgently need lawmakers to act. Officials say they continue to press for legislation that will give them greater flexibility to control costs and make new revenues.
Congressman Brian Higgins, who has worked to protect postal jobs staying in Buffalo, issued this statement Wednesday afternoon:
"For over a year now we have witnessed the Postmaster General's unilateral, decide now, and justify later approach. Arbitrary closing lists, including the facility right here on William Street in Buffalo, is just one example of his reckless rule. Under the Postmaster's leadership, the USPS displayed a complete lack of transparency and accountability throughout the processing facility closure nightmare. They used flawed data and discouraged public engagement. All of this casts serious doubt that the current leadership is up to the task of leading the Postal Service through these challenging times and that's why last June I sent a letter to the Board of Governors calling on them to take action to remove and replace the Postmaster General.
"This action is happening in part as a result of frustrating Washington dysfunction. Comprehensive postal reform would relieve the obligation to prefund pension obligations and would dramatically change the balance sheet of the Postal Service. Last year I was among more than 220 bipartisan cosponsors on a bill that would recalculate the pension funding requirement. This bill has the votes to pass and should have been brought to the Floor but the Speaker has refused to do that. This is an economic issue that stretches far beyond the USPS institution. Congress should step up, put aside politics, and do what's right for small businesses, working families and postal customers nationwide.
"The Postal Service points out a change in mailing habits by customers, due to email and other societal adaptations. Dismantling services and the speed of delivery in an increasingly fast-paced world seems to be a step backward that will only further corrode the relevance of the Postal Service, setting up an already struggling institution for failure moving forward."
Contributing: Associated Press
USA Today & AP