WASHINGTON — President Barack Obama’s call for the U.S. Postal Service to end Saturday mail delivery and raise rates will drive away customers while not addressing needed cost reductions, some business users and lawmakers said.
Obama, as part of his spending plan released yesterday, proposed to let the Postal Service reduce delivery from six to five days a week by January 2013 and to return $10.9 billion it overpaid into a federal retirement account. The proposal was made to and not acted upon by Congress’s deficit-reducing supercommittee last year.
“Eliminating Saturday delivery should be the last resort, not the first choice,” Sen. Susan Collins, R-Maine, said through a spokeswoman. “It would force businesses ranging from newspapers to home-delivery of medicine to explore non-postal delivery options. Once these customers leave the mail system, they won’t be coming back, and the Postal Service’s revenues would suffer another blow.”
A bill with sponsors including Collins and Tom Carper, a Delaware Democrat, would prevent cutting a day of mail delivery for at least two years. Obama’s proposal is in a bill sponsored by Darrell Issa, a California Republican. Issa also wants to require a financial-control board if the service defaults on obligations to the U.S. government and create a commission to speed up post office closings.
Both bills have been passed by committees.
The Postal Service has said ending a day of delivery each week would save $3.1 billion annually. The service has said it expects to lose $14.1 billion in the year ending Sept. 30, and according to Obama’s budget, it may lose $13.6 billion in its 2013 fiscal year.
Ending Saturday delivery would harm customers mailing pharmaceuticals and time-sensitive newspapers and magazines, said Gene Del Polito, president of the Association for Postal Commerce. The Alexandria, Va.-based group’s members include Medco Health Solutions, Time Warner and Conde Nast Publications.
“Businesses abhor uncertainty,” Del Polito said in a telephone interview. “So they will do what they can to try to create for themselves a predictable cocoon in which to operate. And in this case the predictable cocoon does not include mail. And that exacerbates Congress’s challenges.”
Rate increases will also push business customers away, said Art Sackler, coordinator for the Coalition for a 21st Century Postal Service, whose members include FedEx Corp. and Bank of America Corp.
“Raising postal rates won’t save the Postal Service; it will only hasten its demise,” Sackler said in an email. “Higher rates will force companies away from using the mail, and push them into finding other ways to reach their customers.”
The Postal Service has proposed each of the changes Obama advanced as well as reducing its workforce by firing as many as 220,000 employees and closing post offices and mail-processing plants.
Obama’s budget didn’t address the facility closings or job cuts.
“It’s a political hot potato for them,” Del Polito said. “They don’t want to tick off a key Democratic constituency going into a national election.”
The Postal Service reported a $3.3 billion loss in the quarter ended Dec. 31, which is typically its strongest because of holiday-season mailing of packages and cards.
Most of the quarterly loss came from a U.S. law requiring the service to pay in advance for future retirees’ health-benefits costs. Obama proposed changing that payment schedule to account for fewer employees.
The package of postal changes would provide $25 billion of cash over the next two years and would result in $25 billion of savings over 11 years, Obama said in the budget plan.
The president’s proposal includes some provisions of the Senate proposal, Carper said in a statement. “We can’t let the Postal Service fail on our watch,” he said.
Issa, while praising the proposal to end Saturday delivery, said Obama’s package won’t make the service solvent. “Infusing the agency with cash and hiking postage rates without requiring USPS to reduce costs and realign itself to meet America’s changing use of mail is just buying a very small amount of time with a very big check,” he said in a statement through his spokesman, Ali Ahmad.
Nobody wants to stop Saturday deliveries that i can see out side the beltway, but there is no appetite in Washington budget cutting circles to sustain the Post Office deficits. This will not stop Obama from being held accountable for the consequences of cuts the republican balonies are forcing through in all areas of govt. Lots of folks are in love with cuts but nobody wants to deal with their consequences.
I don’t want to deal with the calamity of not initiating cuts. I can deal with the cuts.
I agree, its just the hypocrisy of trying to have it both ways politically that drives me wild.
The political system is broken and in my opinion can only be fixed with a one term limit in congress and a law illegalizing political action commitee influence in government. The post office might recoup some of it’s costs by no longer allowing c0ngressional or presidential free postage and by charging business the same as they charge me to mail their junk flyers..
Then are those businesses will to pay 60, 70, 80 cents for a first class stamp? As for Susan Collins’s argument that if they end Saturday delivery, businesses will no longer us the USPS. Funny thing is they said the same thing about twice a day delivery.
Medication is widely available at local pharmacies and with a little planning, nobody will ever get caught short. Printed magazines and newspaper circulation is collapsing and there is no need to keep Saturday delivery in place to try to sustain them. People are using electronic media now – the mail system is a relic.
What about people that don’t have the internet ?
Could I forward all the junk mail I have to recycle to your house.
You forgot to mention post office said that it will take longer for people to get there mail too no more fast mail either
the last person I would want mixing in with this discussion is that war mongerer Susan Collins..what a disgrace that this state re-elected her to the Senate. another one who should have been kicked out ages ago.
Oh good, do the wrong thing to try and make the Dems look bad. A typical Repub. ploy. The correct thing would be to cut Saturday AND Wednesday.
Stop Saturday delivery. Just keep post office locations open during hours a working person can get there.
Most people use email and pay bills online I have not have good service with the post office in Ma
Sent my son in Somerville Ma a Christmas card and a money order and he did not get it
What’s in their thick Republican skulls?
The Post office may loose 13.6 BILLION in 2013………..Republicans answer…….Blame Obama.
US Post office says: “ending a day of delivery each week would save $3.1 billion annually.” Republicans solution……Blame Obama.
Do they REALLY think ‘we the people’ are that gullible?
Businesses objecting that a public business wants to reduce it’s massive financial losses just goes to prove who’s interests they are really looking after. Whatever happened to the pretense of community spirited businesses?
The hot question is why can UPS and Fed Ex operate in the green while the US Post Office prints so much red ink……Well let UPS and Fed Ex stop exclusively serving only the profitable parts of delivery and make them set up offices and staff in every little town and village across this nation then see how profitable they remain, you can rest assured that if that happened they would raise prices many times and delivery of a single letter would cost upwards of $2.
The US Post Office founded in 1775 when Benjamin Franklin appointed the first Postmaster General is now in serious jeopardy………Republicans solution……..BLAME OBAMA! Really makes you wonder doesn’t it?
http://georgewbush-whitehouse.archives.gov/news/releases/2006/12/20061220-6.html
Thats right she stands right behind George W while he signs into legislation the death blow to the Post Office .
This law required the funding of the post office employee pensions 75 years in advance!
“Now” she Blames Obama!
You say 2 dollars to send a letter by UPS you are wrong it would cost 11:35 dollars to send a letter from Waterville to Portland i know i went to UPS an ask then an that’s what i was told by them to send that same letter to San Francisco would cost 13:25 dollars . Now if they pick up a letter at you house it will cost even more to send a letter . They would not set up an office in every town i bet some place you would half to drive 8 to 10 miles or more to mail stuff .
You should learn how to read! Issa a REPUBLICAN who is sponsering Obama proposal. I forgot democrats only see what they want to see.
80% of their cost is labor and the union’s have no layoff contracts…that’s a recipe for failure and the government know’s this and is trying to protect the worker’s future with the insurance and pension fund payment’s. When they allowed competition there should have been a universal service fund set up for all to pay into to keep the home letter deliver service viable. Airline’s , telephone and rail ” except Amtrak ” have all gone through deregulation and privatization and the consumer’s have all come out ahead on this.
Don’t let Susan Collins Fool You!
Who do you think that women in the Red Dress is!
http://georgewbush-whitehouse.archives.gov/news/releases/2006/12/20061220-6.html
First she helps enact a Law Destroying the Post Office.
Then She pretends to Save it!
And Blame Obama!
In the words of Ronald Reagan , { ( Insert susan collins, delete government)}
Susans Collins is NOT the solution,
Susan Collins IS the Problem!
This is crazy talk. When did this become an Obama move to end Saturday delivery? Let me explain with brief timeline.
In 2006, congress passed the Postal Accountability and Enhancement Act. In this law was a requirement that the postal service “pre-fund” anticipated pension liabilities for 75 years, in just ten years of payments. This is something no business, public or private, is required to do. The cost has been $5.5 billion per year since 2008 when the first payment was made. Good luck finding a vote tally on this bill. It was passed using a rushed procedure where votes are not officially tallied. to be sure, nobody wanted their fingerprints on this bill to destroy the USPS.
Since that time, the postal service has paid this monstrous sum into the treasury. Also during this time, the recession hit, affecting mail volumes. The combination of the extreme pre-payments and reduced mail volume has put the USPS in the red by how much? You guessed it, $5.5 billion.
Last year, Sen. Collins and others sponsored a bill that does not deal with the pre-funding, it only give a one time funding to the USPS to get them through for another year or two. Also stipulated, no more money.
That brings us to today’s article with Ms. Keane of Bloomberg suggesting that cutting postal operations is suddenly Obama’s idea.
From the beginning it was clear what the pre-funding bill was. It was a poison pill to bankrupt the postal service and pave the way to privatizing mail delivery. Not surprisingly, the sponsor and 3 co-sponsors received significant campaign contributions from UPS that year. This bill was written for them, after all.
Because Congress has not acted to remove the poison pill, the president has slated cuts in his budget. He does not have the power to amend legislation. The real culpability for the situation rests on the congress of 2006 that passed this under a suspension of the rules, right before heading home for the holidays. There was no debate. There were no amendments
Why the BDN runs these misinformation pieces, disguised as opinion, I do not understand. The real story requires the set up of what happened to bring us to where we are. By starting with the recently provided budget is misleading. Shenanigans like this bill and its process are indicative of why we need good journalism to bring the entire story to us so we can understand what is happening. Instead, we have Bloomberg and the BDN presenting a very distorted picture of this important issue that affects each and every one of us. This was intended to provide cover for the congress and their nefarious deeds as well as to damage the president by making him the bad guy in the decline of the Postal Service.
And now you know the rest of the story…..
Thank you.
The article states 14.1 billion in the red this year. OK let’s minus 5.5 billion for pension = 8.8 billion in the red, now minus 3.1 billion savings for closing 1 day a week = 5.7 billion in the red. No layoff contracts. What a job to have. The USPS is going to be deregulated and privatize so hang on it’s gonna be a ruff ride for 512,000 employees.
The only programs the right really want to cut are those that benefit the lower class. The rich know that those that are “movin on up” will be in direct competition for resources with their rich little kids.
Susan needs to cut back on the makeup. She looks like a clown.
That pension fund return will be eaten up inside of three years…Stop the insanity…How are people who apparently would still favor the telegraph and Pony Express making these decisions???
STOP Saturday delivery, cut the number of post offices, layoff (yes, layoff) postal workers, increase bulk mailing costs, end franking privileges for Congress, and lift the ban on UPS and Fed Ex from carrying non-priority mail…OR…Have all Americans cease using electronic communication such as email or DISQUS posts…write letters instead…and that’s not going to happen.
These people would still be banning autos from using the road if a horse was passing by…STOP IT!!!
You better hope UPS dose not take over some of the mail it will cost as much as $13.25 to send low priority to the west coast
I find it difficult to put any trust in any of these politician’s they all need to have their pay revoked until they get their heads out of their collective asses.and no more pension’s either.
https://www.dmachoice.org/dma/member/regist.action Opt out junk mail, credit card application’s and magazine offer’s. 60 to 90 days to be removed from list’s. If you do it electronically it last 5 years…. by mail it’s permanent removal. Take control of the mail you receive.
It seems the ones who are screaming the loudest about cutbacks are those who currently get the sweetest deal – magazines, and other “Bulk” mailers. Perhaps it’s time they pay their fair share or suffer one less delivery day……. It seems that each time a rate increase is proposed they scream “not us “………Personally, I could live without Saturday delivery, and if folks reorder their meds in a timely fashion that sould not be an issue either……..I find it amusing that those who helped pass the law to create this pension funding mess are now appearing to try and spin the story to their advantage.
NO mail on Tuesday….LIVE WITH IT
she looka like a man
The answer is staring them all in the face…cut Sat. delivery, cut a day in the week, cut, cut, cut. Cut out the fat. The USPS is NOT working and hard decisions NEED to be made.
………and STOP trusting our political representatives to do the job of cutting the USPS. They are gutless wonders. They are the reason we are in this fix, and they are the biggest part of the problem.