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In 2010 the Postal Service laid out a series of reforms it said were needed to cut billions of dollars from its operating costs and help the agency survive and thrive in a more digital future.

The biggest pitch: Ending Saturday delivery for letters, which the Postal Service had estimated would save about $3 billion annually.

But years later an improving financial landscape and a Congress continually deadlocked over Postal Service reform has led to a slow and quiet death for what was once seen as the linchpin of a revitalized Postal Service.

"While the topic of five-day delivery was a large part of the legislative ask in the last Congress, we are currently looking to gain consensus and we have not been promoting five day as a key tenet," said Postal Service spokeswoman Sue Brennan.

She said the Postal Service still needs to find ways to increase revenues and optimize its networks while delivering fewer pieces of mail to more addresses.

Delivery Squeeze
The Postal Service has seen declining mail volume even as the number of addresses increases.
Mail delivery20072008200920102011201220132014
Mail Volume (billions)212.2202.7176.7170.9168.3159.9158.4155.4
Delivery Points (millions)148.0149.2150.1150.9151.5152.1152.9153.9
Source: Postal Service

Opposition to five-day delivery has always been high - and in the last few years it might have been enough to derail any reform effort geared toward cutting out Saturday letter delivery.

Rep. Sam Graves has co-sponsored a resolution in the House along with Rep. Gerry Connolly, D-VA., that states the Postal Service should do whatever it can to preserve Saturday delivery. Introduced in January, the proposal now has 200 co-sponsors, and its proponent expect to reach 218 soon – a majority in the House.

Graves said members of both parties have overwhelmingly shown they oppose the push to eliminate Saturday delivery, and that lawmaker support for the resolution is encouraging.

"While we need to keep our eyes open to proposals like these going forward, the message has been received that Congress will not tolerate the USPS moving away from 6-day delivery," Graves said.

See also: Postal Service union contract talks break down over pay

See also: Postal Service pushes for reforms as finances improve

Graves and Connolly introduced a similar resolution in 2013, which eventually gained 228 co-sponsors.

Connolly said the concept of ending Saturday delivery has faded as a priority. He also sits on the House subcommittee that oversees the Postal Service, and said while the committee continues to work on Postal Reform, ending Saturday delivery is not on the list.

"Notably, eliminating a critical competitive advantage of the Postal Service – Saturday mail delivery – has receded from the priority reform proposals in light of the current reality that USPS is looking to expand its business opportunities to meet the rapidly evolving needs of e-commerce. Indeed, recently I have begun to notice that I am no longer surprised when I spot my local USPS letter carrier delivering parcels on Sunday," Connolly said.

He said he is also impressed with Postmaster General Megan Brennan's continued willingness to listen to stakeholders and develop creative compromises. He said she is also focused on more high-priority concerns, such as ending a requirement to prefund retiree health benefits and revamp Postal Service health coverage to better integrate Medicare.

"The new reality of 7-day delivery, combined with the fact that the current Chairman of the Committee does not support eliminating Saturday mail delivery, indicates that the sentiments of our bipartisan Graves-Connolly Resolution may already be reality among key postal policymakers," Connolly said.

The prefunding requirement for retiree health benefits continues to be a high point of contention regarding Postal Service finances.

The Postal Service saw a controllable income – revenues minus controlled expenses – of about $313 million in the second quarter of fiscal 2015. But after factoring in the Postal Service's obligation to prepay for 75 years of retiree health benefits and fund its worker compensation fund, the service shows a net loss of $1.5 billion.

Overall revenue grew by $223 million – or about 1.3 percent over the same period in fiscal 2014. Operating expenses fell by $160 million, contributing to the overall increase in income. So far this fiscal year the Postal Service has seen $1.4 billion in controllable income.

While the Postal Service is seeing an improved financial landscape, The Postal Service has said the it still needs legislation to overhaul the agency and provide for a greater investment in future priorities.

While removing the Postal Service's prefunding of retiree health benefits would give it some time to make improvements, but it also wants greater workforce flexibility and wants Medicare to become the primary insurance of eligible postal retirees. The agency also needs to make billions of dollars of investments in its fleet and building infrastructure, technology and other areas.

Chris Edwards, the editor of the Cato institute's Downsizing Government blog, said that the de-emphasis on ending Saturday delivery shows an unwillingness to tackle serious issues.

"The fact that it is off the table is disappointing in and it shows that congress is not serious about postal reform," Edwards said.

Edwards, who supports the idea of cutting Saturday delivery, said it is a sensible business decision for the agency and that as time goes on Congress wlll have to get serious about passing meaningful reform. He pointed to European nations who have completely privatized their postal agencies as an example.

"It shows how backwards out postal service discussion has been," Edwards said. "Especially in the tough business environment the postal service has now they need the flexibility of the private sector in terms of things like cutting Saturday delivery."

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