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Postal Service to End Delivery of Letters on Saturdays Postal Service to End Delivery of Letters on Saturdays
(about 5 hours later)
WASHINGTON — The Postal Service is expected to announce on Wednesday morning that it will stop delivering letters and other mail on Saturdays, but continue to handle packages, a move the financially struggling agency said would save about $2 billion annually as it looks for ways to cut cost. WASHINGTON — Saying it needed to take drastic steps to stem billions of dollars in losses, the Postal Service announced on Wednesday that it would seek to stop Saturday delivery of letters, a sweeping change in the way the agency operates that immediately drew criticism from postal unions and some businesses.
The agency has long sought Congressional approval to end mail delivery on Saturdays. But Congress, which continues to work on legislation to reform the agency, has resisted. It is unclear how the agency will be able to end the six-day delivery of mail without Congressional approval. The financially struggling agency said the change to a five-day mail delivery schedule would occur in August and would save about $2 billion annually. The Postal Service would continue to deliver packages on a six-day schedule, and post offices would continue to be open on Saturdays.
News of the move was first reported by CBS News. “Our financial condition is urgent,” said Patrick R. Donahoe, the postmaster general, at a news conference announcing the change. “This is too big of a cost savings for us to ignore.”
The announcement, which is expected at a Wednesday morning news conference, comes as the agency continues to lose money, mainly due to a 2006 law which requires it to pay about $5.5 billion a year into a future retiree health benefit fund. Last year, for the first time, the agency defaulted on two payments after it had reached its borrowing limit from the Treasury Department. The Postal Service also continues to see a decline in mail volume as more people shift to electronic forms of communication like e-mail and online bill paying services. Packaging is one of the few areas where the agency is seeing growth. Mr. Donahoe said the move to end Saturday delivery was part of a five-year plan to return the agency to profitability. Last year, the Postal Service had a net loss of $15.9 billion. Since 2010, the agency has reduced hours at many small, rural post offices and cut staff, and also announced plans to reduce the number of its mail processing plants.
While many business and postal unions have generally opposed ending Saturday delivery, most Americans support the move. But post office officials say the cuts and staff reductions are not enough.
A New York Times/CBS News poll last year found that about 7 in 10 Americans say they would favor the change as a way to help the post office deal with billions of dollars in debt. The Postal Service continues to suffer losses of $36 million a day and is headed for projected losses of about $21 billion a year by 2016. Last year, the Postal Service had a net loss of $15.6 billion. The agency has long sought Congressional approval to end mail delivery on Saturdays. But Congress, which continues to work on legislation to overhaul the agency, has resisted. Under a Congressional mandate that has been in place since 1981, the Postal Service is required to deliver mail six days a week. But post office officials argue that since the government is operating under a stopgap budget measure, known as a continuing resolution, that mandate does not apply, giving them the authority to make the changes without Congressional approval.
The American Postal Workers Union, which represents about 220,000 workers and retirees, said the plan to end six-day delivery will add to the agency’s financial problems. Representative Blake Farenthold, Republican of Texas and chairman of the House Oversight Subcommittee on the Postal Service, called the action a step in the right direction.
“The A.P.W.U. condemns the Postal Service’s decision to eliminate Saturday mail delivery, which will only deepen the agency’s congressionally manufactured financial crisis,” said Cliff Guffey, president of the union. But some members of Congress called the Postal Service claim that it had the authority to go to a five-day delivery schedule dubious, setting up a potential showdown between the agency and the Congressional committees that oversee it.
“The passage of the continuing resolution did not suspend that language, as they claim, but in fact extended it,” said Representative José E. Serrano, Democrat of New York and ranking member on the Appropriations Subcommittee on Financial Services and General Government, which also has jurisdiction over the Postal Service. “Rather than use very dubious legal arguments to end Saturday delivery, the U.S.P.S. should work hand-in-hand with Congress to come up with a successful restructuring and reform package that allows them to become more efficient while maintaining vital services like Saturday delivery.”
Senator Thomas R. Carper, Democrat of Delaware, who led a bipartisan effort to pass a postal overhaul bill last year, called the post office decision disappointing and said it was the intent of Congress that the agency provide six days of mail delivery.
But he added: “Despite my disappointment, it’s hard to condemn the postmaster general for moving aggressively to do what he believes he can and must do to keep the lights on at the Postal Service, which may be only months away from insolvency.”
Last April, the Senate passed a bill that provided retirement incentives to about 100,000 postal workers, or 18 percent of its employees, and allowed the Postal Service to recoup more than $11 billion it overpaid into an employee pension fund. The Senate bill did not stop Saturday deliveries immediately, but it would have allowed the agency to revisit the issue in two years.
The House took no action on its overhaul bill, and the legislation died in the last Congress. The House bill would have allowed the post office to end Saturday delivery.
House Speaker John A. Boehner, Republican of Ohio, expressed his hope that progress would be made on postal overhaul legislation, but said that he understood the dilemma facing the Postal Service, since "Congress, in its wisdom, has tied their hands every which way in order for them to actually run the post office in a revenue-neutral way.”
The new Congress is set to begin work on new legislation, but it is unclear when the legislation would be taken up as lawmakers work to avert a series of across-the-board spending cuts scheduled to take place in March.
Most Americans support ending Saturday mail delivery. A New York Times/CBS News poll last year found that about 7 in 10 Americans say they would favor the change as a way to help the post office deal with billions of dollars in debt. The Obama administration also supports a five-day mail delivery schedule.
But postal unions and some businesses on Wednesday called the move to five-day mail delivery misguided.
“Postmaster General Patrick Donahoe’s plan to end Saturday delivery is a disastrous idea that would have a profoundly negative effect on the Postal Service and on millions of customers,” said Fredric Rolando, president of the National Association of Letter Carriers.” It would be particularly harmful to small businesses, rural communities, the elderly, the disabled and others who depend on Saturday delivery for commerce and communication.”
Many companies said ending Saturday delivery would have a devastating effect on their businesses.
The American Forest and Paper Association, whose members include the paper and packaging industry, said the Postal Service change to a five-day delivery schedule will only deepen the agency’s financial problems.
“The U.S. Postal Service’s decision to eliminate six-day mail delivery is a shortsighted solution with questionable financial savings and will only drive volume out of the system, stripping both the U.S.P.S. and businesses that depend on the mailing industry of potential revenues,” said Donna Harman, president and chief executive of the association.
Drug delivery companies like Medco, based in Franklin Lakes, N.J., have also expressed concerns about eliminating Saturday delivery, saying the change would delay orders for prescription drugs, creating difficulties for patients who need their medications on time.
The move to end Saturday delivery comes as the post office continues to lose money, mainly due to a 2006 law that requires the agency to pay about $5.5 billion a year into a future retiree health benefit fund. Last year, for the first time, the agency defaulted on two payments after it had reached its borrowing limit from the Treasury. The Postal Service continues to suffer losses of $36 million a day and is headed for projected losses of about $21 billion a year by 2016.
The Postal Service also continues to see a decline in mail volume as more people shift to electronic forms of communication like e-mail and online bill paying services. Packaging is one of the few areas where the agency is seeing growth. The post office has seen its packaging delivery business grow 14 percent since 2010, officials said.
The change to delivery schedule is in line with postal operations in several other countries. Canada went to five-day delivery in 1969. Sweden and Australia also deliver the mail five days a week. Post offices in Germany offer Saturday delivery for an additional fee.
Despite Wednesday’s announcement, post office officials said they still needed Congress to act on legislation to give the agency greater flexibility to control cost and generate new revenue.
“We need Congress to make postal reform an urgent priority,” said Mr. Donahoe.

This article has been revised to reflect the following correction:

This article has been revised to reflect the following correction:

Correction: February 6, 2013Correction: February 6, 2013

An earlier version of this article misstated the news organization that first reported the Postal Service’s plans to end Saturday service. It was CBS News, not The Associated Press.

An earlier version of this article misstated the news organization that first reported the Postal Service’s plans to end Saturday service. It was CBS News, not The Associated Press.