Postal cuts all about the bottom line

Congress a wild card in the debate

Opposition to the proposed cuts has come from the letter carriers’ union, farmers, and lawmakers.
David Goldman /Associated Press
Opposition to the proposed cuts has come from the letter carriers’ union, farmers, and lawmakers.

WASHINGTON — The Postal Service plans to cut back to five-day-a-week deliveries for everything except packages to stem its financial losses in a world where the Internet has dramatically altered how we communicate and pay our bills.

‘‘Our financial condition is urgent,’’ Postmaster General Patrick R. Donahoe declared Wednesday.

The way the Postal Service describes it, the move allows the service to change with the times in hopes of eventually operating in the black.


But previous efforts by the service to make cutbacks have been stymied by Congress. Some questions and answers about the current plan:

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Q: What is the plan, and when would it take effect?

A: Beginning in early August, mail would be delivered to homes and businesses from Monday through Friday only but would still be delivered to post office boxes on Saturdays.

Post offices now open on Saturdays would remain open, and delivery of packages of all sizes would continue six days a week. Packages have been a bright spot for the agency. Package delivery has increased by 14 percent since 2010, officials said, while the delivery of letters and other mail has plummeted.

Q: Why has the Postal Service decided to cut back?


A: Money. The Postal Service suffered a $15.9 billion loss in the past budget year and has forecast more red ink in 2013. It says it expects to save $2 billion annually with the Saturday cutback. The Postal Service does not receive tax money but is subject to congressional control over major aspects.

The red ink comes mostly from a 2006 law forcing it to pay about $5.5 billion a year into future retiree health benefits, something no other agency does. Without that payment — $11.1 billion in a two-year installment last year — and related labor expenses, the agency had an operating loss of $2.4 billion for the past fiscal year, lower than in the previous year.

The Postal Service is in the midst of a major restructuring. Since 2006, it has cut annual costs by about $15 billion, reduced the size of its career workforce by 193,000, or 28 percent, and consolidated more than 200 mail-processing locations, officials say.

Q: What has been the reaction to the plan?

A: It has been met with vigorous objections from farmers, the letter carriers’ union, and lawmakers.


Democratic Senator Mark Begich of Alaska called it ‘‘bad news for Alaskans and small business owners,’’ who he said need timely rural deliveries.

Senator Susan Collins, Republican of Maine, questioned the savings estimate and worried the loss of Saturday service might drive customers away.

Still, the Postal Service clearly thinks it has the public on its side. Its market research indicates that nearly 7 in 10 people support the switch as a way to reduce costs, Donahoe said.

Q: Can the Postal Service really make this change?

A: It thinks so. The proposed change is based on what appears to be a legal loophole. Congress has long included a ban on five-day-only delivery in its spending bills, but because the federal government is now operating under a temporary spending measure rather than an appropriations bill, Donahoe says the agency can make the change itself.

Might Congress try to block the idea?

‘‘Let’s see what happens,’’ Donahoe said. ‘‘I can’t speak for Congress.’’

Q. What do regular mail customers think?

A. Reaction has been mixed. ‘‘It is bad news, a bad decision, let me tell you,’’ said Konstantine Christov, 73, in Chicago. ‘‘You can read the mail much more quietly on Saturday.”

‘‘The mail isn’t that important to me anymore . . . I don’t sit around waiting for it to come,’’ said James Valentine, in Toledo, Ohio. ‘‘It’s a sign of the times. . . . It’s not like anyone writes letters anymore.’’