USPS: Five days a week?

Just as it has done to many American businesses, the economic downturn is affecting the U.S. Postal Service. And now, postal officials are going to Congress, asking for a lifeline through stormy economic waters.

Senator Tom Carper (D.-Del.), chairman of the Senate's Federal Financial Management, Government Information, Federal Services and International Security Subcommittee, part of the Homeland Security and Governmental Affairs Committee, states the sobering reality that the U.S. Postal Service is in deep trouble on a scale that could have nationwide implications.

"The Postal Service is expected to suffer significant losses in the current fiscal year," he said in his opening statement, "and I'm told those losses could rise to $7 billion dollars or more."

The numbers tell the tale. Last year, the Postal Service experienced the biggest one-year drop in mail volume in history - 202 billion items, down 9 billion from the year before. Even with a regular rate hike in postage, the Postal Service lost 2.8 billion dollars last year.

Postmaster General John Potter came to the subcommittee Wednesday, hat in hand, with a very short list he says he needs to help the Postal Service survive the downturn.

We need two things: a change in the funding of our health benefit premiums, and flexibility in the number of days that we deliver. My first priority is changing the law requiring the Postal Service to pay its retiree health benefit premiums from our retiree benefit trust fund. This will save the Postal Service 2 billion in fiscal year 2009. My second priority is to provide the Postal Service greater flexibility to manage our way through the current crisis by allowing us to curtail delivery on our lightest volume days, no more than one day a week.

Staring with the proposed reduction in service, Potter wants Congress to remove a "rider" or amendment, to a 1983 Postal Service bill that specified by law that USPS deliver mail six days a week. He says he needs the flexibility, just as any business has, to adjust service at a time when costs are up, and people are finding other alternatives such as electronic bill payment, to the mailing services of USPS.

It might surprise you to know that the lightest day for mail delivery is not Saturday; it's Tuesday, although both days are under consideration for the proposed one-day cut in service if the idea is ultimately approved. And it might not be for the whole year, but just during the summer months.

Maine Republican Susan Collins, who was chairman of the full committee the last time postal reform legislation was passed, zeroed in on the downside of this idea.

If businesses, newspapers, and others that have time sensitive mail, can no longer rely on six days a week delivery, they're going to find other means of delivering their information, whether it's hand delivery, or the Internet.

But Potter says there's only so much he can do in this situation.

What's more detrimental? Raising the rates above the rate of inflation, because we don't have the opportunity to furlough people, we're bound by our employee agreements. Do we lower service by incrementally going after things? Or is it better to go to the American people and say that for one day a week for the summer, we're not going to deliver the mail.

Potter also asked that Congress ease the requirement that it make advance payments into a fund to cover future health benefits for retirees. Last year the post office was required to put $5.6 billion into the fund.

"We are in uncharted waters," Potter said. "But we do know that mail volume and revenue - and with them the health of the mail system - are dependent on the length and depth of the current economic recession."

He proposed easing the retirement pre-funding for eight years, while promising that the agency will cover the premiums for retirement health insurance.

At the same hearing the Government Accounting Office agreed that the post office is facing an urgent need for help to preserve its financial strength. But the GAO suggested easing the pre-funding requirement for only two years, with Congress to determine the need for more relief later.

Chairman Carper says firmly that Congress' preference would be no change to six-day delivery, or to the pension fund rescheduling. At this point, there is no word on ir or when the subcommittee will consider either proposal.

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