* Lawmakers agree legislation needed, disagree on contents
* Rural areas fear harm from postal cutbacks
By Elvina Nawaguna
WASHINGTON, Feb 13 U.S. Postmaster General
Patrick Donahoe pleaded with lawmakers on Wednesday not to block
the financially strapped Postal Service from moving ahead with
plans to end Saturday first-class mail delivery.
Last week, the Postal Service rattled lawmakers and other
stakeholders when it announced plans to end delivery of
first-class mail, magazines and direct mail on Saturdays,
starting in August. The plan, the Postal Service said, would
save the agency $2 billion a year when fully implemented.
No law requires the Postal Service to deliver mail six days
a week, but Congress included a provision in legislation to fund
the federal government each year that has prevented the USPS
from reducing delivery service.
The current funding measure expires in March, and would free
the Postal Service to change its delivery schedule unless
Congress prohibits it in the next spending resolution.
But some lawmakers and trade groups have argued that the
savings from this plan are too small compared to the $20 billion
budgetary gap the Postal Service needs to fill.
The Postal Service, which lost nearly $16 billion last year,
has been grappling with tumbling mail volumes as Americans
communicate more online, and has struggled under the weight of
massive required payments for future retiree health benefits.
It has repeatedly urged Congress to pass legislation to
restructure its operations and allow it to get on better
"The financial problems of the Postal Service are getting
bigger every year," Donahoe said at a Senate committee hearing.
"Congress can avoid a future scenario in which the Postal
Service requires a taxpayer bailout - which could be in excess
of $45 billion dollars by 2017 if we don't change our business
Lawmakers at the hearing agreed that urgent postal
legislation was necessary, but they were divided over how to
save the Postal Service and whether the switch to five-day
delivery is wise.
Representative Darrell Issa, a California Republican who has
been a leading proponent of new postal service legislation, said
in testimony that other countries such as Australia, Canada,
Finland and Spain have successfully shifted to five-day
delivery, and the USPS can do the same and save money.
TAXPAYER OR RATE PAYER
"It's very clear that ultimately, either the rate payer or
the taxpayer will have to pay the $20 billion in debt of the
Postal Service," Issa said.
But Democratic Representative Elijah Cummings of Maryland,
who opposes the plan to end Saturday first-class mail delivery,
said the new schedule would not solve the Postal Service's
"Unfortunately, the most significant challenge facing the
Postal Service today is not Saturday delivery or declining mail
volume or prefunding healthcare for its retirees. It's
Congress's failure to act," Cummings said. "Obviously, we cannot
solve this problem if we continue to ignore it."
The Postal Service pays $13.1 billion annually in healthcare
costs, including mandatory payments into its future retirees'
healthcare fund. The Postal Service has blamed much of its
financial troubles on this prefund mandate put in place by a
Current laws, Donahoe said, limit the flexibility of the
struggling mail carrier to implement changes that would help it
become more profitable and offer new products and services. He
wants lawmakers to allow it to control its own employees'
healthcare funding, which he said could save up to $7 billion
"If legislation is not enacted - and soon - to provide the
necessary reforms and flexibilities to achieve savings and
generate new revenues, we will all be back here again,
discussing the same issues," Donahoe told the Senate Committee
on Homeland Security and Governmental Affairs.
Under pressure to cut costs and raise revenues, the Postal
Service has eliminated more than 190,000 jobs over the last six
years, reduced operating hours and is in the process of
consolidating dozens of mail processing centers. But it still
needs Congress to free its hands to handle more of its affairs.
Cummings said he is hopeful Congress can pass legislation by
the end of March. But there were concerns that some of the
proposals from lawmakers and the Postal Service could hurt rural
communities, some of which do not have broadband access.
"If we're going to have a mail service that is going to work
well for urban America, darn right it better work well for rural
America," said Democratic Senator Jon Tester of Montana. "The
first thing we've done is cut service and I think that's the
worst thing we've done."
Jeanette Dwyer, president of the National Rural Letter
Carriers' Association, urged Congress to act swiftly with postal
legislation while preserving six-day delivery. The plan to cut
Saturday delivery, she said, could cost the NRLCA about 20,000
"Less service equals less mail; equals the beginning of the
end of the Postal Service," Dwyer said.