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Posted at 1:30 PM ET, 12/ 2/2010

New Postal chief pushes Saturday delivery cuts

By Joe Davidson, Federal Diary columnist

Patrick R. Donahoe began his first congressional hearing as postmaster master general-designate on a sunny note.

"Despite recent headlines, the Postal Service remains a very strong and motivated organization," he told a Senate Homeland Security and Government Affairs subcommittee on Thursday.

Motivated for sure.

But moments after Donahoe's brief bit of optimism, he described an organization that is financially very weak.

"Our total loss for the [fiscal 2010] year was $8.5 billion," said Donahoe, who officially becomes postmaster general on Saturday. "This is a stunning number in many aspects, and it is unsustainable."

On that point, everyone agrees. There's less agreement on how to nurse the U.S. Postal Service back to health, particularly on what it says is a vital remedy: cutting one day of delivery.

Whatever the fix, all agree the service needs help fast.

"The truth is that we're rapidly approaching a time when we may no longer be able to depend on the Postal Service," said Sen. Tom Carper (D-Del.), chairman of the federal services subcommittee. "That time may come less than a year from now."

Sen. Susan M. Collins of Maine, the top Republican on the full committee, summed up the Postal Service's financial condition with one word: "abysmal."

She and Carper each have introduced legislation designed to keep USPS from death's door.

Both would allow the Postal Service to recoup $50 billion the Postal Regulatory Commission estimates USPS has overpaid into the Civil Service Retirement System.

Carper said his POST Act, short for Postal Operations Sustainment and Transformation Act, would allow the Postal Service to use that money to pay for retiree health benefits, an obligation that has significantly worsened its financial problems.

"This would take $5.5 billion or more off the Postal Service's books each year and prevent a catastrophic shutdown in the coming months," Carper said.

Both bills would allow USPS to close existing facilities and in some cases locate them with retail establishments.

"I want to point out that before co-location decisions could be made, the bill would direct the Postal Service to weigh the impact of any decisions on small communities and rural areas and solicit community input," Collins said in a statement. "The bill also would require that co-location does not diminish the quality of service."

On the question of reducing delivery service from six days to five, Donahoe, during an interview after he testified, said the move is "crucial" to returning USPS to a financially healthy state. Carper's legislation would give USPS authority cut one day of service without congressional approval.

"Unfortunately, Congress each year prevents the Postal Service from exercising its authority to change delivery frequency when it believes that doing so is necessary...," he said. "I'm not an advocate of eliminating Saturday delivery. There are good arguments both for and against what the Postal Service would like to do. But I am an advocate of giving the Postal Service the freedom to manage, especially when our interfering in management decisions could prevent the achievement of so much in savings at such a critical time."

Postal unions don't see any good arguments for five-day delivery.

Fredric V. Rolando, president of the National Association of Letter Carriers, said doing away with Saturday delivery would eliminate 80,000 jobs during a recession. "Congress would essentially be outsourcing a key public policy decision to whoever occupies the position of postmaster general at any given time," he said. "There would be no way to prevent the Postal Service from dropping two or even three days of delivery per week."

Leave your thoughts in the comments section below

RELATED: Federal Eye coverage of the U.S. Postal Service

By Joe Davidson, Federal Diary columnist  | December 2, 2010; 1:30 PM ET
Categories:  Congress, Postal Service  
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Comments

Why does Carper's bill have to include the discontinuation of Saturday delivery option? The USPS should be refunded their 50 billion overpayment. That, attrition and eliminating management bonuses should take care of the problem.

Posted by: dar973 | December 2, 2010 4:04 PM | Report abuse

The article above notes: "The truth is that we're rapidly approaching a time when we may no longer be able to depend on the Postal Service," said Sen. Tom Carper (D-Del.), chairman of the federal services subcommittee. "That time may come less than a year from now."

The truth is that ethnic community newspapers already know they cannot depend on the USPS. Due to the very poor and irregular delivery of our newspapers (sent by second-class mail), we are losing subscribers at a significant pace. Readers don't see why they should pay for news that is delivered to their homes a week, or two or three late. And yet, junk mail always gets to postal customers on time... The USPS's incompetence is causing us to lose readers and is putting our very existence in jeopardy.

Posted by: rhadz | December 2, 2010 4:07 PM | Report abuse

I paid my congressman thousands to keep our post office off the closing list.

Posted by: blasmaic | December 2, 2010 4:11 PM | Report abuse

i say do away with saturday delivery I don't use the mail anyway to pay or receive bills most of may mail is junk mail anyway.

Posted by: lucky1109 | December 2, 2010 4:19 PM | Report abuse

Another stupid, unreasoned idea, brought to you by the folks at the USPS. You don't cut customer services, you cut waste. Over transportation, yep the postal service has it, Over processing, yep, got that too. Hum, let's see, waiting? Yes, in spades, inventory? Maybe, possibly. Motion? Yep, got that too, defects? Sure, how much mail needs to re-routed because it’s been delivered to the wrong address? Let's also look at the services the USPS offers that don't make money. If they don't pay for themselves, they should know why. Here's a chart that anyone can create for themselves: Every time the USPS has raised rates it has cut service and lost customers and income. Then they go to the PRC and say that it's something else’s' fault and they wonder why they're losing money. The answer is simple. The USPS has to make the customer value their service instead of telling the customer that serving you costs too much. How many times have you been in a post office with a long line and then a couple of windows close making your wait in line even longer. That demonstrates a total disregard and lack of respect for the customer. People are your customers and it's time that the USPS started treating their customers with some respect, because the truth is, except for large advertisers, most people really don't need you all that much any more. Cutting Saturday delivery, just helps to drive that point home.

Posted by: WriterDude | December 2, 2010 4:21 PM | Report abuse

I'm a lonely, blind 105-year-old widow living in the middle of Nowhere, USA. I need my junk mail. It keeps me company. PLEASE DON'T DO THIS TO AN OLD WOMAN.
I will die if Saturday mail delivery is discontinued.

Posted by: TaxiDriver | December 2, 2010 4:21 PM | Report abuse

There is another significant savings procedure to mail delivery that rarely if ever is mentioned. The Post Office should end delivery to each and every household/business address and leave mail in 15 or 20 compartments grouped in one mail box. Customers might have to walk or drive a block to retrieve their mail. The cost of delivery would fall dramatically and much of the P.O.'s red ink could be turned to black.

Posted by: rrickards10 | December 2, 2010 4:21 PM | Report abuse

The Postal Service puts itself in a downward spiral by cutting all Saturday deliveries. It should compromise and deliver only First Class, Priority and Express Mail on Saturday. Right now Saturday delivery is the one thing USPS offers that other carriers don't. Limiting Saturday delivery to the premium class mail would cut expenses substantially while keeping a service customers really want. Most of us want our First Class Mail delivery, but can wait on our discount-postage mail.

Posted by: cassandra9 | December 2, 2010 4:28 PM | Report abuse

I wonder if any other nation on the face of the earth has discussions about the relevance of postal services?
Now, I don't condone the idea of waste, but even partially privatizing the USPS was misguided, at best.
I think it is also important to remember that the only thing you can get from Fedex or UPS for less than a buck is directions to the nearest Post Office.

Posted by: OldUncleTom | December 2, 2010 4:41 PM | Report abuse

I wonder if any other nation on the face of the earth has discussions about the relevance of postal services?
Now, I don't condone the idea of waste, but even partially privatizing the USPS was misguided, at best.
I think it is also important to remember that the only thing you can get from Fedex or UPS for less than a buck is directions to the nearest Post Office.

Posted by: OldUncleTom | December 2, 2010 4:42 PM | Report abuse

Cut the waste, cut the salary of upper management especially the $5.5M for the big dog, let them have the $50M discussed in the article AND stop Saturday delivery - do it all and do it now.

Posted by: CassieCharlie | December 2, 2010 4:44 PM | Report abuse

The U. S. Postal Service MUST be allowed to recoup $50 billion the Postal Regulatory Commission estimates USPS has overpaid into the Civil Service Retirement System.

Posted by: jbowen431 | December 2, 2010 4:53 PM | Report abuse

Charge first class rates for all that junk mail we get and the Post Office would show a profit.

Posted by: FromHerndon | December 2, 2010 5:15 PM | Report abuse

As a nation, we seem no longer able to afford teachers for the young, the postal service, retirement or health care. We also "need" 9% permanent unemployment. The Republicrats rule.

Posted by: funfun881 | December 2, 2010 5:19 PM | Report abuse

Other nations, such as Canada, have not had Saturday delivery for a long and the sky has not fallen in. Why don't we go for 3 days a week delivery? Say Mondays, Wednesdays, and Fridays.

Posted by: kwoodgr | December 2, 2010 6:00 PM | Report abuse

Elimination of Saturday Mail is GOOD common sense in this GOP caused depression.
I don't mind skipping Saturday and Sunday mail.
It's a mighty small sacrifice compared to what our soldiers have been and still are making for Bush and Cheney's AMORAL war, and the GOP's AMORAL elimination of unemployment income (at Christmas, for Pete's sake) when --let alone toys . . . it means no food or housing or clothes for how many former workers who CAN"T find jobs?

Posted by: lufrank1 | December 2, 2010 6:22 PM | Report abuse

Well there were two industry's (monopolies) that government should of left alone or should say left as were. One being AT&T the bell systems and the United State Post Office. You let the USP and Fed X's take the cream of the crop jobs away from the post office and left them with the house to house delivery's.
UNIONS are the main destruction of the United States Post Office. You can't control cost when you are hog tied by the UNIONS. That is why I don't think Unions should be allowed in an government entity.

Posted by: drdavisdr | December 2, 2010 6:34 PM | Report abuse

The USPS is a stunning example of how a union can totally destroy an organization. That, and the fact that our representatives (past and present) haven't the chutzpah to do what's right by the American people and give post office executives the green light to rid the service of about half of its card carrying "work" force and bloated "management" hierarchy.

Posted by: JAH3 | December 2, 2010 6:49 PM | Report abuse

does this mean that mr.donahoe will take a pay cut for only working five days a week.

Posted by: SISSD1 | December 2, 2010 6:49 PM | Report abuse

guess this means will not have more crap to dispose of when i go to the mailbox.

Posted by: pofinpa | December 2, 2010 6:57 PM | Report abuse

guess this means will not have more crap to dispose of when i go to the mailbox.

Posted by: pofinpa | December 2, 2010 6:58 PM | Report abuse

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Posted by: highshopping | December 2, 2010 7:14 PM | Report abuse

The last time they said they were in trouble and in the "red" was because the volume of mail had decreased leaving them with less income. I believe the decrease was a pretty hefty per cent. If I can use the internet, automatic withdrawal, Fed Ex, UPS, etc., which costs less than the USPS, why shouldn't I use them? If I am a business man and my volume of sales decreases 20%, common sense and business sense tells me I need to "lay off" 20% of my staff or cut their pay and benefits, or I will be in the "red" also. So Mr. Postmaster General, with decreased volume, cut your staff, cut your high paying salaries, and by cutting your staff you not only save that money, but also save money on their lost benefits, perks, etc. They can then dive into Obama Care at his suggested lower rates than what it costs the USPS to cover them. I hope the next Congress passes a law demanding that the total benefits plus salary are to be posted in all local newspapers which serve each postal location. The President needs to take over the unions like President Reagan did to the air controllers union. We didn't suffer, but they became more efficient. If those salaries are posted there would be a verbal uprising similar to the one in California when the citizens learned what the officials of their town were making.

Posted by: jjeleven | December 2, 2010 7:51 PM | Report abuse

A strong...organization. Lets see, the regular mail carrier blasts Rush Limbaugh from his portable while miss placing the mail in our common cube box at the old apartment complex and the replacement subjects us to religious music, like it or not. Could they please use some of that health care $ for hearing tests for their carriers. Or maybe the could union buy they an MP3 player and a decent set of headphones.

Posted by: geraldohawaii | December 2, 2010 7:53 PM | Report abuse

Why does no one ever consider increasing postal rates? America's postal rates are MUCH lower than most other developed countries, yet America is one of the largest countries in the world, with a very spread out population. 65 cents for a first class domestic letter is appropriate, NOT 44 cents, and would solve all of the USPS' financial problems.

And yes, I want my mail on Saturday!!

Posted by: AnonymousBE1 | December 2, 2010 8:01 PM | Report abuse

So we should continue to fund the postal service just so we won't have to lay people off??!!???

How about looking at this from the perspective of making it a viable, break even business?

With a great deal of mail going the email route there is little need for six days per week delivery.

I for one would be happy to have four days per week if it would leave the postal service in the black instead of the red and would not feel badly about the layoffs.

The unions would keep them at six days a week delivery with no lay offs and not care a wit if the American public has to pay for it.

Posted by: buzzsaw1 | December 2, 2010 8:46 PM | Report abuse

For some reason I have not been getting my mail until 6:30 or 7 PM; one day the mail still hadn't been delivered at 7:45 PM. I have no idea why my mail used to come reliably by 5:30 every day is now coming later and later. Eliminating Saturday service will not help that problem.

Posted by: cab91 | December 2, 2010 9:03 PM | Report abuse

YES, Yes, yes, and in rural communities let's reduce from 6 days to 3. Save some fuel, save money, save the planet!

Posted by: schafer-family | December 2, 2010 9:11 PM | Report abuse

Let's cut delivery to three days a week and put rural post offices in spaces with other businesses.

Posted by: AntiPost | December 2, 2010 9:45 PM | Report abuse

if free market demint and his congressional colleagues would stop forcing the usps to subsidize the junk mailers with first class revenue then there would be no need to cut saturday delivery or eliminate post offices. he only believes in free markets for industries that do not contribute to his campaign. the direct mailers-which he once was himself-line his campaign coffers.

Posted by: george32 | December 2, 2010 10:25 PM | Report abuse

The problem is that the Government has made the P.O. a business not a service and has expected it, therefore, to take care of itself. It is NOT a business; it is a service - and a very important service for all Americans. Being considered a business has meant long lines and not enough employees. It needs to be treated like the service it is, given more funds and allowed to hire more employees. And yes, keep Saturday service!

Posted by: zoldoske | December 2, 2010 10:33 PM | Report abuse

The problem is that the Government has made the P.O. a business not a service and has expected it, therefore, to take care of itself. It is NOT a business; it is a service - and a very important service for all Americans. Being considered a business has meant long lines and not enough employees. It needs to be treated like the service it is, given more funds and allowed to hire more employees. And yes, keep Saturday service!

Posted by: zoldoske | December 2, 2010 10:34 PM | Report abuse

My husband has been a postal worker for 35 years. During this time he has held almost every position offered and has done so with professionalism and dedication.
He goes to work every night and gives 100%.
I am extremely proud of him.

Posted by: angryamerican1 | December 2, 2010 10:51 PM | Report abuse

The USPS is this centuries steam engine. Mail volume is going to continue to decline because less and less younger people use mail for anything.

90 percent of the mail delivered to me goes right in the trash without ever being looked at because it is unsolicited JUNK.

So we give them their 50 billion dollar over payment. That means that next year they will still have a deficit of almost 4 billion dollars.

Its just more money down a hole

Posted by: bjeagle784 | December 2, 2010 11:13 PM | Report abuse

Canada has NEVER had Saturday postal delivery. What is all this fuss about in the US?

Posted by: queensland | December 2, 2010 11:47 PM | Report abuse

buzzsaw and other whiners and complainers, the Postal Service doesn't get ONE penny in taxes from you, so shut the hell UP!

Posted by: wolfdem1 | December 3, 2010 12:35 AM | Report abuse

Buzzsaw and other complainers, the Postal Service doesn't get one penny in taxes from you, so put a cork in that whine!!!!

Posted by: wolfdem1 | December 3, 2010 12:37 AM | Report abuse

Yes major brands do give out samples of their popular products best place is "123 Get Samples" search online, I just received mine

Posted by: kathrynmerry | December 3, 2010 3:55 AM | Report abuse

Time to start charging a dollar or more for all online bill payments. Part to go to the USPS and part for the unemployment caused by companies using auto pay over mail and clerks.

Posted by: gmclain | December 3, 2010 9:49 AM | Report abuse

Here's something to think about.. If the USPS stops Saturday delivery, there goes 80,000 jobs. That is way too many jobs lost because Republicans wants to keep the money for the rich and forget about the working families who puts money into their pockets. The carriers do NOT make the high money like people thinks they do like the big Federal employees. Meaning high office people. Let those high office people take a sake and walk like the carriers do and see if they could handle it. Also, have them be back before 5PM. Then they would see just how many accidents happen due to being in a hurry to get the job done. That is where most of the money does go.. To the carriers who runs the route and gets hurt doing it just to satisfy the bosses. Some routes are way too large then the mail gets delivered by someone else besides the regular carrier. The personal touch that the carriers used to do is gone. Upper management does not want the carriers to be concern with the elderly or with anyone else. The carriers ARE the eyes & ears of the world. They see things first because they know their customers and sees them 6 days a week. Carriers has called the fire & police faster than some stranger. They respond faster when a carrier does the call too. As for the mail, the processing is what slows down. The carriers carries everything what they get. Carriers does not get any of the bonuses like the other Federal employees gets. Charge the companies who has auto pay online for every bill that does not go threw the postal service. Some companies charge a surcharge for paying the bill online like the electric companies do. Also charge for the emails too. A penny per message does add up. Doing this would save the clerks as well as the mail carriers. I agree with gmclain. The money would help the postal service as well as the unemployment.

Posted by: Toots5695 | December 3, 2010 1:34 PM | Report abuse

3 days a week is more than enough, especially if everyone is forced to pay more-equal rates. There is no real logic for bulk-rate junk mail, since the actual cost to deliver a piece of mail is pretty constant - the first piece is the most expensive, while each subsequent piece is incrementally smaller, not much different than running a bus line or an airline. Once the letter carrier arrives, it doesn't matter if they leave 1, 8, 20 or 35 pieces of mail, as long as they're not too bulky or heavy (packages). Plus, the union jobs argumet is irrelevent - the USPS is a delivery service, not an employment service!

Posted by: jzavist | December 3, 2010 4:35 PM | Report abuse

This is exactly what is wrong with our government -- the Post Office has been losing money every year for the last 10-15 years and we keep giving them money. How much more do they lose before someone uses good management practices and cuts their losses. Cutting Saturday delivery would be a good first step - of course after salary, pension, and bonus's.

Posted by: flyfisherinCA | December 3, 2010 5:39 PM | Report abuse

I would like to see the post office resort to using the passenger pigeon if it should ever make a come back. I believe they would be more reliable than what we have now.and they wouldn't ever get sick or have to go on the disabled list like a lot of them that I know do.

Posted by: stephenct450 | December 3, 2010 8:42 PM | Report abuse

It amazes me how many misconceptions of the Postal Service that the American people have. I would like to share a few facts the Post and USPS management have not shared with the American people.
1) The financial crisis at the Postal Service, including the large losses in recent years and the $12 billion debt the paper decries, is not due to postal labor costs or the Internet. All of the losses and the entire debt are due to the massively unrealistic and unaffordable payments to pre-fund future retiree health benefits that Congress mandated between 2007 and 2016, of which $20.9 billion have been made in the past four years. No other public agency or company in America, including The Washington Post Company (which does not pre-fund its retiree health benefits at all), is required to pre-fund such benefits.

2) The postal unions are not “lobbying the Congress to release the Postal Service from its requirement to pre-fund about $5 billion in retiree health benefits,” as today’s editorial asserts. As we told the editors in our face-to-face meeting, we are simply asking Congress to allow the USPS to use its massive pension surplus to cover the cost of the pre-funding payments.

Two independent, well respected private sector actuarial firms, The Hay Group and The Segal Company, have found that the USPS has overfunded its pension plans by between $50 billion and $75 billion over the past 40 years. If we were allowed to transfer these funds to our retiree health benefit fund, which currently has more than $42 billion in it, we would have fully funded all our future liabilities—currently estimated to be $92 billion over the next 75 years.

A pension transfer is sound public policy that is consistent with best practice in the private sector among ERISA pension plans. It would not only allow us to save the $5.5 billion we are being charged each year, but it would allow us to avoid the kind of draconian cuts in service that The Post seems to take such joy in advocating—the elimination of Saturday delivery, the closing of thousands of post offices and the elimination of 80,000 jobs in the midst of a recession
3) The Post has exposed its gullibility by swallowing hook, line and sinker the bogus claim by postal management that “federal law gives unions the edge in collective bargaining with postal management,” as claimed in the latest editorial. It offers no evidence of this whatsoever, because there is no evidence. Postal wages and postage prices have risen in line with inflation over the past 40 years of bargaining and postal productivity gains have more than allowed the USPS to absorb the rising cost of benefits (especially health benefits) while taxpayer subsidies that once covered a quarter of the budget were eliminated.

reprinted from nalc.org.

Posted by: LetterCarrier | December 8, 2010 9:00 PM | Report abuse

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