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Obama backs ending one day of mail service to help postal service cut massive losses
WASHINGTON (AP) ' President Barack Obama said Monday the U.S. Postal Service should be allowed to reduce mail delivery to five-days-a-week to help cut its massive losses.
The Postal Service lost $8.5 billion last year and is facing even more red ink this year as the Internet siphons off large amounts of first-class mail and the weak economy reduces advertising mail.
While the post office has cut more than 100,000 workers in the last few years it needs to cut more, close offices and find other ways to reduce costs to keep operating.
In his economic growth and debt reduction plan unveiled Monday, Obama endorsed the idea of dropping one day of mail delivery ' it is expected to be Saturday ' and urged other changes in postal operations
He agreed that nearly $7 billion the post office has overpaid into the federal retirement system should be refunded to the agency, urged that its payments for advance funding of retiree medical benefits be restructured, and said the post office should be allowed to sell non-postal products and raise postage rates.
Currently the post office cannot raise rates more than the amount of inflation.
Postmaster General Patrick Donahoe said the president "has offered helpful recommendations to stabilize the Postal Service's financial crisis."
Sen. Tom Carper, D-Del., who has proposed a bill including many of the same suggestions, welcomed the president's statement.
"I have been saying for some time now that Congress and the administration need to come together on a plan that can save the Postal Service and protect the more than seven million jobs that rely on it," he said in a statement.
Rep. Darrell Issa, R-Calif., who has his own postal reform bill in the House, responded that "the president's proposal is not what taxpayers or the Postal Service needs."
He asserted that Obama's plan "will certainly cost taxpayers money." Currently the post office does not receive tax funds for its operations.
Meanwhile, 75 members of Congress led by Reps. Gerry Connolly, D-Va., and Don Young, R-Alaska, called on the independent Postal Regulatory Commission to block the post office's plans to close as many as 3,700 local offices across the country.
The proposed closures, most in rural locations that do little business, are currently under review.
The letter called for establishment of a new business model for the post office without closing offices and cutting its work force.