The Board of Governors of the United States Postal Service issued a statement today saying that despite wanting to end Saturday delivery of regular mail in August, congressional action is forcing it to keep those cards and letters coming six days a week as usual. The USPS had sought to end Saturday letter delivery while keeping package delivery in an effort to save $2 billion a year. The USPS, with $65 billion in revenues, has been losing about $15 billion a year, in part because of what it sees as an onerous pre-funding of retirement benefits, also required by Congress. The USPS is self-funded and does not receive taxpayer funds.
The USPS has also sought a more level playing field with private delivery services like FedEx and UPS, especially for package delivery. Among other things, the USPS is limited by what kinds of items can be sent by mail, hence the litany of questions one is asked when sending Christmas cookies.
While the USPS says that the public is in favor of discontinuing residential service (SEE STATEMENT BELOW), Congress sees it far differently, especially Vermont's Senator Bernie Sanders, who has championed the continuation of Saturday delivery, while acknowledging that the Postal Service needs more flexibility in its business model. Sanders also has railed against the pension stipulation.
‘ This is good news for rural communities, businesses, seniors, veterans and others who depend on consistent and timely delivery of the mail,’ Sanders said in a statement. ‘ We all recognize that the Postal Service is experiencing financial problems, which is why I have offered comprehensive legislation to modernize the Postal Service and rescind an onerous requirement for it to pre-fund 75 years of future health care benefits for retirees.’
Citing a legal opinion by the Government Accountability Office, Sanders in a March 26 letter had urged Postmaster General Patrick Donahoe to withdraw his plan to stop Saturday mail. Sanders said the opinion by the non-partisan GAO unambiguously declared that the Postal Service has no legal authority to end Saturday mail without the approval of Congress.
Sanders and Representative Peter DeFazio (D-OR) on February 13 introduced legislation to modernize the Postal Service, save Saturday mail and repeal a crippling law responsible for 80 percent of the mail system’ s funding woes.
Under the legislation that now has 18 Senate cosponsors, the Postal Service would look for innovative new ways to make money by lifting legal bans on services such as notarizing documents. It also would clear the way for the Postal Service to help customers take advantage of email and Internet services. Sanders’ bill would create a commission composed of successful business innovators and representatives from small business and labor to make recommendations on other ways the Postal Service could generate new revenue and thrive in the 21st century.
A critical reform, Sanders said, would rescind an onerous 2006 law "pushed through a Republican-controlled House at the behest of President George W Bush." Unlike any private business or other government agency, Sanders said, the law makes the post office pre-fund 75 years of future health care benefits for retirees over the course of 10 years. The $5.5 billion annual payments have been piling up in a fund that experts say already has more than enough in reserve. Since 2007, the pre-funding mandate is responsible for $4 out of every $5 in Postal Service debts.
Statement from the US Postal Service Board of Governors
The Board of Governors of the United States Postal Service met April 9 and discussed the Continuing Resolution recently passed by Congress to fund government operations. By including restrictive language in the Continuing Resolution, Congress has prohibited implementation of a new national delivery schedule for mail and packages, which would consist of package delivery Monday through Saturday and mail delivery Monday through Friday, and which would have taken effect the week of Aug. 5, 2013.
Although disappointed with this Congressional action, the Board will follow the law and has directed the Postal Service to delay implementation of its new delivery schedule until legislation is passed that provides the Postal Service with the authority to implement a financially appropriate and responsible delivery schedule. The Board believes that Congress has left it with no choice but to delay this implementation at this time. The Board also wants to ensure that customers of the Postal Service are not unduly burdened by ongoing uncertainties and are able to adjust their business plans accordingly.
The Board continues to support the transition to a new national delivery schedule. Such a transition will generate approximately $2 billion in annual cost savings and is a necessary part of a larger five-year business plan to restore the Postal Service to long-term financial stability. According to numerous polls, this new delivery schedule is widely supported by the American public. Our new delivery schedule is also supported by the Administration and some members of Congress.
To restore the Postal Service to long-term financial stability, the Postal Service requires the flexibility to reduce costs and generate new revenues to close an ever widening budgetary gap. It is not possible for the Postal Service to meet significant cost reduction goals without changing its delivery schedule ‘ any rational analysis of our current financial condition and business options leads to this conclusion. Delaying responsible changes to the Postal Service business model only increases the potential that the Postal Service may become a burden to the American taxpayer, which is avoidable.
Given these extreme circumstances and the worsening financial condition of the Postal Service, the Board has directed management to seek a reopening of negotiations with the postal unions and consultations with management associations to lower total workforce costs, and to take administrative actions necessary to reduce costs. The Board has also asked management to evaluate further options to increase revenue, including an exigent rate increase to raise revenues across current Postal Service product categories and products not currently covering their costs.
The Board continues to support the Postal Service’ s five-year business plan and the legislative goals identified in that plan, which will return the Postal Service to financial solvency. The Board additionally urges Congress to quickly pass comprehensive postal legislation, including provisions that would affirmatively provide the Postal Service with the ability to establish an appropriate national delivery schedule.