Congress Thwarts Post Office’s Plan to Eliminate Saturday Delivery
Last month United States Postal Service Postmaster Patrick Donahoe warned that the Postal Service was on the brink of default. He proposed cutting Saturday delivery service as a way to save $2 billion annually. But in a setback to the agency's cost-saving efforts, Congress has passed legislation requiring a six-day postal service delivery schedule. Now the Government Accountability Office has released a report finding that USPS is bound to Congress' spending agreement. The beleaguered mail carrier lost roughly $16 billion in 2012.
The Postal Service is an independent agency, which means it is not funded by tax dollars. Instead, USPS functions like a business, making about $15 million in revenue each day on sales of postage, products, and services. Congress does not allocate money to support the mail service, but still holds legislative control over it.
Congress typically includes a provision in its federal budget each year that requires USPS to deliver mail six days a week and despite pleas from the Postal Service, lawmakers included it in their final resolution on Thursday.
The latest ruling has left many incensed. Polling shows that the majority of Americans support the United States Postal Service decreasing its delivery service. David Partenheimer, a spokesman for USPS, has said that five-day delivery is essential for keeping the Postal Service from becoming a burden on taxpayers. If Congress does not allow the post office to adapt to its customers' changing needs, Partenheimer says, USPS will be forced to ask for a taxpayer bailout to the tune of $47 billion by 2017.
This is not the first time that Congress has meddled with the USPS business model. One reason the postal service loses $25 million every day is because it must “pre-pay” into a fund that covers pensions and health care for employees who will retire in future years. In 2006 Congress mandated that the postal service was legally required to provide $5.5 billion in annual payments each year until 2016. Without this requirement, USPS would have actually made $1 billion in profits.
USPS is a well-run business with over 31,000 retail locations and annual revenue of over $65 billion. If the postal service was a private company, it would rank 42nd in the 2012 Fortune 500 list of the largest U.S. corporations by gross revenue. USPS insists that it is only trying to suit the needs of its customers and become sustainable.
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