Fight over future of Saturday mail delivery continues

By Emily Long

March 3, 2011

The U.S. Postal Service's proposal to eliminate Saturday delivery continues to draw opposition from lawmakers.

Rep. Sam Graves, R-Mo., on Wednesday introduced a resolution calling on the Postal Service to preserve its six-day delivery schedule. Any reduction in service would cause post offices to close, limit access to mail for some areas and cut jobs for letter carriers, he said. Graves has introduced a similar measure in previous years.

"Regular and reliable mail delivery is like a lifeline to many of our seniors and others who count on the U.S. Postal Service to receive prescription drugs, Social Security checks and other important mail," Graves said. "Reducing delivery to five days per week would put an undue burden on those living in rural areas and our most vulnerable citizens everywhere."

USPS spokesman Gerald McKiernan said five-day delivery is an important step toward improving the agency's efficiency.

"Declining mail volumes demand that we match workload to our network," he said. "For the vast majority of Americans, there will be no change in the level of service they've come to expect."

USPS has posted significant losses recently, including $329 million in the first quarter of fiscal 2011, because of a $1.4 billion pre-funding obligation to retiree health benefits and a $700 million workers' compensation liability. In addition, the agency has overpaid its Civil Service Retirement System account by $75 billion and contributed nearly $7 billion beyond its obligations to the Federal Employees Retirement System.

Postal officials have been pushing for cost-saving changes outlined in the agency's 10-year strategic plan. They want the flexibility to reduce delivery days from six to five, authority to close post offices for economic reasons and a reprieve from the requirement to pre-fund retiree health benefits.

Postmaster General Patrick Donahoe told members of a House subcommittee on Wednesday that unless Congress provides some relief, the agency will reach its borrowing limit and will default on its $5.5 billion obligation to the health benefits fund due Sept. 30.

One of the few lawmakers to take action on the delivery day issue is Sen. Tom Carper, D-Del., who last year sponsored a bill that would grant USPS flexibility to adjust mail delivery frequency. In addition, the legislation would require the Office of Personnel Management, which also contributes to CSRS, to recalculate the Postal Service's obligations to the account, allow USPS to close post office locations and have arbitrators consider the agency's finances during labor negotiations. Carper plans to reintroduce the legislation this spring.

During Wednesday's hearing, Del. Eleanor Holmes-Norton, D-D.C., said eliminating a delivery day could cause hardship in some areas of the country, but noted lawmakers are the only barrier to change.

Other subcommittee members expressed opposition to the plan, saying USPS has other options for turning around its finances.

"Before we do layoffs and change delivery frequency, we need to alter the benefit payment schedule that cannot account for changing demand," said Rep. Stephen Lynch, D-Mass.

Lynch on Wednesday announced plans to reintroduce legislation from July 2010 that would reduce the agency's burden to fund its CSRS account and reverse years of overpayment. Rep. Gerry Connolly, D-Va., will sponsor a similar bill in the coming weeks.

Sen. Susan Collins, R-Maine, in February introduced legislation that would fix the Postal Service's overpayment to its CSRS and FERS accounts, improve the agency's contracting practices, and shift employees receiving workers' compensation to the appropriate retirement system upon reaching retirement age. That measure would not alter current delivery schedules, however.

President Obama's fiscal 2012 budget proposal provides some short-term financial relief for the Postal Service but includes language preserving six-day delivery. That plan would return FERS overpayments to the Postal Service over 30 years, including $550 million in fiscal 2011. The agency also would receive $4 billion in temporary relief from its retiree health benefits pre-funding requirement in fiscal 2011, though it would be required to make up the difference with larger payments in future years.

By Emily Long

March 3, 2011