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Monday, September 05, 2011

Postal Service's declining finances increase pressure to eliminate Saturday mail delivery

The U.S. Postal Service's plan to close more than 3,500 post offices made its problems more of a concern for rural Americans, and the concern may increase as the service nears what would amount to bankruptcy and renews its efforts to persuade Congress to eliminate Saturday mail delivery.

U.S. Sen. Susan Collins of Maine, "like many lawmakers from rural states, vigorously opposes ending Saturday delivery, which would trim only 2 percent from the agency’s budget," reports Steven Greenhouse of The New York Times. "Collins, the ranking Republican on the committee overseeing the postal service, said the cutback would be tough on people in small towns who receive prescriptions and newspapers by mail."

Collins told Greenhouse, “The postmaster general has focused on several approaches that I believe will be counterproductive. They risk producing a death spiral where the postal service reduces service and drives away more customers.” She and Sen. Tom Carper, D-Del., chairman of the committee, favor "recovering around $60 billion that some actuaries say the agency has overpaid into two pension funds. Although the Obama administration is working closely with the senators to find a solution, it has signaled discomfort with the pension proposals, questioning whether the postal service really overpaid. Meanwhile, Rep. Darrell Issa, the California Republican who is chairman of the House Oversight Committee, says the pension proposals would amount to an unjustifiable bailout that would not solve the agency’s underlying problems. He is pushing a bill that would create an emergency oversight board that could order huge cost-cutting and void the postal service’s contracts — a proposal that not just the unions, but Senators Carper and Collins oppose."

But some action will be necessary soon. Greenhouse writes, "The agency is so low on cash that it will not be able to make a $5.5 billion payment due this month and may have to shut down entirely this winter unless Congress takes emergency action to stabilize its finances." (Read more)

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