April 10, 2013 at 11:38 AM ET
The United States Postal Service said Wednesday that it would delay its plan to cease delivery of first-class mail on Saturdays, rescuing for now a service that it says is costly but that many Americans rely on.
The USPS said in a statement that restrictive language in Congress' continuing resolution to fund government operations has forced it to postpone the move until "legislation is passed that provides the Postal Service with the authority to implement a financially appropriate and responsible delivery schedule."
The Postal Service said that while it is disappointed, it will follow the law but will continue to push to eliminate Saturdays, which it says would save the cash-strapped service about $2 billion a year.
"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. 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," said the USPS statement.
In February, the Postal Service announced that it would cease delivery of first-class mail on Saturday beginning August. It said it would continue to deliver packages, mail-order medicine, and express mail on Saturday, but not letters, bills, cards and catalogs.
Wednesday's announcement throws a major roadblock in the way of the 237-year-old agency's attempt to save money as it struggles with the rising popularity of email and social media. The move was also meant to counter the rising costs of funding future retiree health benefits for its workers, as mandated by Congress, which oversees the independent agency of the government.
The idea to reduce first-class delivery to five days a week had been kicked around for some time, but some in Congress have resisted it. The USPS does not use tax money to fund its day-to-day operations.
The agency reported an annual loss of a record $15.9 billion for the fiscal year that ended Sept. 30, triple the prior year's loss and capping a year in which it was forced to default on payments to a health benefit trust fund managed by the Treasury Department. The rising costs for future retiree health benefits accounted for $11.1 billion of the losses.
On Jan. 27, the Postal Service raised postage stamp prices by one cent to 46 cents to help raise revenues. “We are currently losing $25 million per day,” Postmaster General Patrick R. Donahoe warned in January.
On Wednesday, Donahoe said the change to five-day mail delivery would equate to about 22,500 postal jobs, but that the agency would not resort to layoffs to make the reductions. Instead, he said it could easily meet that by eliminating overtime, through attrition and by working with unions on buyouts. The Postal Service currently employs about 520,000 workers.
The Postal Service said that given this decision and its decaying finances, its board of directors has told management to reopen negotiations with the postal unions to lower workforce costs.
"The Board has also asked management to evaluate further options to increase revenue, including an exigent rate increase to raise revenues across current Postal Service product categories and products not currently covering their costs," the service said in a statement.
Rep. Darrell Issa, R-Calif., who has supported the Postal Service's plan, said Wednesday that he too was disappointed.
"This 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," said Issa, who is chairman of the House Oversight and Government Reform Committee.