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USPS backing off plans to cut services

April 11, 2013

Wayne Allen


PDT Staff Writer


The United States Postal Service is backing away from its plan to cut Saturday delivery due to a recent law passed by Congress.


USPS announced in February that starting the week of August 5 they would end Saturday delivery. The move was aimed to save the financially embattled agency $2 billion annually.


On April 9 the USPS board of governors met and talked about the recent continuing resolution recently passed by congress to fund the government.


Included in the resolution was language that according to the post office, “prohibited implementation of a new national delivery schedule for mail and packages, which would consist of package delivery Monday through Saturday and mail delivery Monday through Friday.”


According to released information, the delay will be in effect until Congress passes legislation to help ease the financial burdens USPS is currently dealing with.


“To restore the Postal Service to long-term financial stability, the Postal Service requires the flexibility to reduce costs and generate new revenues to close an ever widening budgetary gap. It is not possible for the Postal Service to meet significant cost reduction goals without changing its delivery schedule – any rational analysis of our current financial condition and business options leads to this conclusion. Delaying responsible changes to the Postal Service business model only increases the potential that the Postal Service may become a burden to the American taxpayer, which is avoidable,” according to information provided by the post office.


At the April meeting the board of governors authorized its management to work on reopening negotiation with postal unions in an effort to reduce expenditures.


According to the Associated Press, the financial losses for the fiscal year ending Sept. 30, 2012 were more than triple the $5.1 billion loss in the previous year.


Having reached its borrowing limit, the mail agency is operating with little cash on hand.


The agency’s biggest problem — and the majority of the red ink in 2012 — was not due to reduced mail flow but rather to mounting mandatory costs for future retiree health benefits, which made up $11.1 billion of the losses. Without that and other related labor expenses, the mail agency sustained an operating loss of $2.4 billion, lower than the previous year.


The health payments are a requirement imposed by Congress in 2006 that the post office set aside $55 billion in an account to cover future medical costs for retirees. The idea was to put $5.5 billion a year into the account for 10 years. That’s $5.5 billion the post office doesn’t have.


No other government agency is required to make such a payment for future medical benefits. Postal authorities wanted Congress to address the issue last year, but lawmakers finished their session without getting it done. So officials are moving ahead to accelerate their own plan for cost-cutting.


This comes on the heels of recent news that USPS would be altering the hours of 13,000 small rural post offices nationwide in an effort to save additional hours. Local offices changing hours include offices in Rarden, Otway, McDermott, Friendship, Franklin Furnace, Stout and South Portsmouth, Ky.


“The Postal Service is currently on an unsustainable financial path and must move forward with actions that are responsible and necessary,” said David Van Allen, USPS Corporate Communications.


According to information provided by the post office, “the Postal Service receives no tax dollars for operating expenses and relies on the sale of postage, products and services to fund its operations.”


For more information about the United States Post Office visit, www.usps.com.


Wayne Allen may be reached at 740-353-3101, ext. 228, or tallen@civitasmedia.com. The Associate Press contributed to this report. For breaking news, follow Wayne on Twitter @WayneallenPDT. The Associated Press contributed to this story.