U.S. Postmaster General John E. Potter went to Capitol Hill on Thursday to seek permission to cut a day of mail delivery as the Postal Service faces the worst financial crisis in its 234-year history, and a key lawmaker said Congress may have to rethink its long-standing opposition to the idea.
Although new regulatory filings show that ending Saturday delivery would not bring major savings until 2011, Sen. Thomas R. Carper, the Delaware Democrat who chairs the Senate Homeland Security and Governmental Affairs subcommittee that oversees the Postal Service, said the situation was so dire that the idea had to be considered.
“With the situation the Postal Service is facing now, it’s time for us to re-evaluate this prohibition,” Mr. Carper said.
One day after announcing a $2.4 billion quarterly loss and continued sharp declines in mail volume, Mr. Potter told lawmakers that the elimination of Saturday mail is “an absolute requirement for the long-term viability of the nation’s postal system.”
Postal officials project more than $7 billion in losses by the time the fiscal year ends Sept. 30. They blame the losses on the recession and increased use of e-mail and online bill payments.
Mr. Potter also appealed to lawmakers to change how the Postal Service funds retiree health benefits, but it’s the elimination of Saturday mail service that has proved to be one of one of the more contentious cost savings.
“Our situation is more tenuous than ever,” he said.
Still, the Postal Service said it doesn’t expect those savings for more than a year, according to a regulatory filing Wednesday.
“We do not anticipate any savings in 2009 or 2010 from the ability to adjust the six-day delivery requirement, if granted,” according to the filing, which was made public by the Postal Regulatory Commission.
“Once granted, there are many operational, contractual, and customer issues that would need to be resolved before actual implementation. However, the flexibility would provide additional cost savings beginning in 2011.”
Dale Goff, president of the National Association of Postmasters, warned the Senate panel about what he called the “clamor” to eliminate Saturday delivery.
Pending legislation sponsored by Mr. Carper could improve the financial outlook by easing requirements that the Postal Service make billions of dollars in advance payments to fund retiree health benefits, postal officials said.
Mr. Potter said the Postal Service cannot afford to make a $5.4 advance payment due at the end of September. Nonetheless, he said, the Postal Service will continue to meet its payroll and deliver the mail.
In the meantime, officials are considering closing or consolidating hundreds of branches nationwide, many located in urban areas on valuable real estate that the Postal Service could sell.
But Mr. Potter said the ongoing review, which includes nine postal facilities in the District and five in Baltimore, probably will result in only “modest” savings because about 80 percent of the Postal Service’s budget is dedicated to labor costs.
Sen. Susan Collins, Maine Republican, expressed frustration to Mr. Potter that the Postal Service faced a new economic crisis after Congress approved measures in 2007 to help the service regain financial viability.
“It is most disappointing to once again be discussing the dire financial condition of the U.S. Postal Service,” she said.
Jim McElhatton is an investigative reporter for The Washington Times. He can be reached at firstname.lastname@example.org.
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