U.S. Postal Service slow down proposal should be rejected, state AGs say

WASHINGTON, June 21 (Reuters) - The attorneys general of 20 states have asked the U.S. Postal Regulatory Commission to reject plans to slow down some first-class deliveries, saying allowing that to happen could harm local governments' ability to fulfill essential functions.

Postmaster General Louis DeJoy proposed in March to revise existing one- to three-day service standards for first-class mail letters to one to five days as part of a plan to cut $160 billion in predicted red ink over the next decade.

The USPS said 61% of current first-class mail volume would stay at its current standard.

The state attorneys general, led by New York, and joined by the District of Columbia, the city of New York and San Francisco, called on the commission to urge the USPS to "abandon this misguided effort and instead focus its attention on improving its performance in delivering First-Class Mail and other market-dominant products."

In formal comments submitted to the commission, the states said the proposal would harm the ability of states and cities "to fulfill essential government functions... (USPS) plan sacrifices speed for reliability, slowing down a significant portion of mail."

USPS has also proposed hiking postage prices for most mail by 7%. Earlier this month, a coalition of retailers, newspapers, printers, greeting card companies and others opposed the plan.

USPS said price hikes are needed because over the past decade, mail volume has declined by 46 billion pieces, or 28%, while single piece first-class mail has declined 47%.

The plan would hike first-class postage by 3 cents to 58 cents. DeJoy also proposed cutting some retail hours and closing some locations.

In May, a bipartisan group of 20 U.S. senators introduced legislation to provide USPS with $46 billion in financial relief over 10 years.

The legislation would eliminate a requirement that USPS pre-fund retiree health benefits for 75 years and require postal employees to enroll in the Medicare government-retiree health plan.

USPS has struggled with poor delivery performance over the past year, facing a huge boost in packages and staffing issues due to the pandemic.

Reporting by David Shepardson; editing by Jonathan Oatis

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