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White House endorses end to Saturday mail delivery; cash relief for USPS

Feb. 14, 2012 - 06:00AM   |  
By SEAN REILLY   |   Comments
U.S. Postal Service letter carrier Juan Padilla sorts bundles of mail as he walks his delivery route in San Francisco. The Obama administration has proposed ending Saturday mail delivery in its 2013 budget request.
U.S. Postal Service letter carrier Juan Padilla sorts bundles of mail as he walks his delivery route in San Francisco. The Obama administration has proposed ending Saturday mail delivery in its 2013 budget request. (Justin Sullivan / Getty Images)

The financially ailing U.S. Postal Service would get the freedom to end most Saturday delivery plus more than $25 billion in cash relief, under the Obama administration's fiscal 2013 budget request.

"Bold action is needed to ensure that USPS can continue to operate in the short run and achieve viability in the long run," the White House said in the document.

Last week, the mail carrier reported a $3.3 billion net loss for the first three months of fiscal 2012 and its chief financial officer warned that it could run out of money this fall.

The administration's proposed relief would come in two forms:

A refund of almost $11 billion in surplus contributions to the Federal Employees Retirement System.

Deferral of more than $15 billion in payments due between 2011 and 2013 for future retiree health care.

Under current law, the Postal Service is supposed to pay $16.7 billion into that fund during the three-year period. The administration instead wants to cut that amount to about $1.6 billion, with the due date for the balance pushed years into the future.

The administration also backs the shift to five-day mail delivery, a step that the Postal Service claims would save more than $3 billion a year. Many members of Congress, however, are opposed; more than half the membership of the House, for example, has signed a nonbinding resolution urging continued Saturday delivery.

Also sure to be controversial is the administration's endorsement of the Postal Service's 2010 bid to increase postage prices above the rate of inflation. The Postal Regulatory Commission, an oversight body, unanimously rejected that increase in September 2010.

The budget request released this week reruns ideas that the White House originally proposed to the congressional supercommittee last September.

In a statement, Postmaster General Patrick Donahoe called the administration's recommendations "helpful," adding that he looked forward to working with the White House and Congress on specific proposals.

But Rep. Darrell Issa, R-Calif., chairman of the House Oversight and Government Reform Committee, said the administration needs to go further.

Giving the Postal Service a cash infusion and the freedom to hike rates without requiring cost-cutting and other changes "is just buying a very small amount of time with a very big check," said Issa, a co-sponsor of postal legislation awaiting action by the full House.

The bill would put the Postal Service under the control of a five-member board if it defaults on any payment such as its retiree health care obligations due to the federal government.

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