USPS makes case for ending Saturday delivery as postal reform push continues

Wednesday - 2/13/2013, 4:45pm EST

Lawmakers in the Senate are taking another crack at comprehensive postal reform legislation after efforts last year fizzled.

The U.S. Postal Service's worsening financial situation led Postmaster General Pat Donahoe to announce last week the agency would end Saturday mail delivery beginning in August.

But Donahoe's announcement divided lawmakers on the Senate Homeland Security and Governmental Affairs Committee. The postmaster general told the committee during a hearing Wednesday the decision was necessary to save $2 billion a year and to begin shoring up the service's funding shortfalls.

But further legislation — to allow the agency to leave the federal health-insurance system and start its own and to end a requirement to prefund retiree health benefits — is needed, Donahoe said.

"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," he said in his prepared remarks.

Does USPS have authority to cut Saturday delivery?

However, some senators questioned Donohoe's legal authority to end Saturday delivery.

Over the years, Congress has inserted a measure blocking a five-day delivery schedule in its annual appropriations bills. But because the government is currently operating under a stopgap continuing resolution, postal officials interpreted that to mean they had the authority to reduce the delivery week, Donahoe said.

But because the CR extended funding levels from the previous year, why wouldn't the policy rider on Saturday delivery also carry over, Sen. Mark Pryor (D-Ark.) asked Donahoe.

"It is our interpretation, based on what my attorneys have told me, that we are clear to move ahead on this," Donahoe said. "I would implore this Congress not to put any other restrictions on us from a six-to-five-day perspective," he said, citing opinion polls showing the American public supports the move.

"That really wasn't my question," Pryor responded. "My question was: What is your legal authority to do it. You said you're satisfied you have legal authority. I'm not. I'm not sure the committee is; I'm not sure the Congress is."

Donahoe: USPS needs more flexibility

Changing the delivery schedules would give the postal service more flexibility, without which it will continue losing money, Donahoe told the committee.

"We can return to financial stability and we can do so with no impacts or burdens on American taxpayers," he said in his prepared remarks. "One key to success is gaining enhanced flexibility to adapt to a rapidly changing marketplace. This flexibility will enable us to remain profitable, by giving us the tools to operate more efficiently, create new products and innovations and to control costs. Absent this flexibility, the postal service will continue to experience sustained losses, in spite of our long-term efforts to reduce costs."

Sen. Tom Coburn (R-Okla.), the ranking member of the committee, seemed to agree.

"There's really 536 postmaster generals, unfortunately," Coburn said. "And the goal of our reform ought to be that there's one. And that we give you the flexibility to do the service, to keep the standards there and have a system that offers the best service at the best price with the best quality the country can have."

In the absence of legislation, USPS has undertaken a number of other cost-saving measures. The service has reduced its workforce by 193,000 workers since 2006, Donahoe said, consolidated 200 mail-processing facilities, cut hours at 13,000 post offices nationwide and reduced 21,000 delivery routes.

Cummings predicts a bill by the end of March

Reps. Darrell Issa, the chairman of the House Oversight and Government Reform Committee, and Elijah Cummings (D-Md.), the committee's ranking member, kicked off the Senate committee's hearing.

Cummings said the two parties — and the two chambers — agree on about 90 percent of the issues surrounding how to restore the postal service to solvency. "The people in this very room can make it happen," Cummings said.

There were, however, significant differences between last year's Senate-passed version of postal reform and the types of legislative changes the House sought. The House never passed a postal reform bill out of committee.

But Cummings said he believes it's possible for Congress to complete a bipartisan bill by the end of March, when the current continuing resolution expires.

Later in the hearing, Sen. Tom Carper, the chairman of the Senate committee, also pressed for urgency.

"If we're still here, in this committee or in this chamber (in the Senate or the House) on August 5" — the official date USPS plans to end Saturday delivery — "debating this issue and postal reform legislation, we have failed," Carper said. "It's imperative that we act."

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