Losing $25M A Day: Will The US Postal Service Cease Saturday Service?

The United States Postal Service is losing $25 million a day, announced Postmaster General Patrick Donahoe on Wednesday during a meeting with the House Oversight and Government Reform Committee. In February, the Postal Service announced that it could save $2 billion a year by eliminating Saturday service, to which Congress responded by adding a rider on a spending bill that mandated delivery on that day. After previously saying that he had the authority to disregard the Congressional action, Donahoe reversed course on Wednesday, saying the Postal Service would comply with the law, while maintaining his support for a new delivery schedule.

"Our customers require certainty, especially about something as fundamental as our delivery schedule," he said. "And so, we announced that we would delay implementation of our new schedule until we gained legislation giving us the ability to move forward."

Donahoe testified before the Congressional committee that the Service's financial problems were attributable to "restrictive laws that prevent us from fully responding to changes in consumer behavior", adding that "any private sector company could quickly adapt to the market changes we have experienced and remain profitable", according to the Wall Street Journal.

Others have placed the blame for the losses on Donahoe's shoulders. In a written statement to the Washington Post, the president of the National Association of Letter Carriers, Fredric V. Rolando, called for the Postmaster General's resignation, saying that "we are convinced that the business strategy the Postmaster General (PMG) is following is doomed to failure".

Donahoe's proposal was received coldly by both Democrats and Republicans representing rural districts, as well as by postal unions who fear job cuts. Other opponents include advocates for the elderly, who still often rely on the mail.

The Washington Post reported that Donahoe listed five points of flexibility that the Postal Service needs in order to run more effectively. These include the freedom to develop and price products quickly, control healthcare and retirement costs of employees by switching to a contribution retirement system for new employees, realign their processing, delivery and retail networks, develop a "more streamlined governance model" and exercise greater flexibility in the way they "leverage [their] workforce".

President Obama's budget, released on the 10^th, calls for two adjustments which overlap with the Postal Service's interests: first, for five-day delivery to begin in June; second, for $11.5 billion to be refunded for retiree healthcare benefits.