Obama renews call to end Saturday mail delivery

WASHINGTON (Reuters) - President Barack Obama’s proposed 2013 budget repeated a call to allow the U.S. Postal Service to end Saturday mail delivery and tap into a retirement-fund surplus, as lawmakers hash out the details of postal legislation.

The budget outline released on Monday included several steps to provide relief to the cash-strapped Postal Service that closely matched plans the Obama administration proposed in September 2011 as part of a deficit-reduction plan.

The 2013 budget updated the amount of savings expected from recapturing a retirement-fund surplus and other steps to $25 billion over 11 years. Last year’s plan forecast savings of $19 billion over 10 years.

The president’s updated proposal comes as pressure mounts on Congress to pass legislation overhauling the Postal Service. The agency announced last week it lost $3.3 billion in its most recent quarter, much of it due to a payment to prefund retiree health benefits.

“Congress and the administration are in agreement that key reforms and resources are necessary if we hope to help the Postal Service recover and thrive,” said Democratic Senator Thomas Carper in a statement.

So far, agreement that reform is needed has been overshadowed by disagreements over post office closings, ending Saturday mail delivery and restructuring benefit obligations.

Eroding mail volumes have hurt the Postal Service as consumers send more email and pay bills online. At the same time, the agency is struggling with high costs, including the prefunding retiree payment, putting the USPS on the brink of insolvency.

The White House plan would reduce the prefunding payments in the short-term, and allow USPS to offer more services to state and local governments and raise postage rates. Many of these proposals appear in a U.S. Senate bill from Carper and others.

But lawmakers remain split on how to help the USPS, which relies on the sale of stamps and other products rather than taxpayer funding. Some want to eliminate the prefunding, while others say that could lead to a taxpayer bailout of USPS benefits. Raising postage rates is controversial, as is ending Saturday delivery.

“(The president) is wrong to suggest the ending of Saturday mail delivery service,” Independent Senator Bernie Sanders told Reuters. “In the long run, if the Postal Service is to grow and become financially stronger, speed and maintaining the current mail delivery standards are terribly important.”

Rural lawmakers have criticized bills in the House of Representatives and Senate for allowing the Postal Service to close some post offices and processing facilities. The White House plan is silent on the issue.

The agency is considering closing thousands of facilities this year. Postal officials agreed to a moratorium on closings until mid-May but are continuing to look at which facilities should close.

More than 100 lawmakers in the House sent a letter to Postmaster General Patrick Donahoe on Monday calling for the agency to consider obtaining more data before closing post offices. They cited a recent report from the Postal Regulatory Commission that said the service could have done more analysis to determine which post offices to close.

“The closure of post offices, stations and branches will undoubtedly affect communities and lead to the loss of middle class jobs,” the letter states.

Editing by Philip Barbara