Senators Move to Halt Postal Service Cutbacks

Image: Senators Move to Halt Postal Service Cutbacks (Andrew Burton/Getty Images)

Friday, 15 Aug 2014 10:51 AM

By Melanie Batley

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Fifty senators have joined forces to try to stop plans for the closure of 82 U.S. Postal Service centers as well as planned cuts of thousands of job, and a proposal to slow down mail delivery deadlines for some types of letters, The Wall Street Journal reported.

The bipartisan group of senators wrote to the Senate Committee on Appropriations to ask them to ban the planned cuts as part of the spending bill to take effect on Oct. 1.

"It has been more difficult for the American public and small businesses to receive mail in a timely manner," the senators wrote, according to the Journal. "Slowing down mail delivery even further will hurt senior citizens on fixed incomes, small businesses and the entire economy."

The postal service already revised its service standards more than two years ago, and the agency argues the changes are needed to modernize its business model because of the Internet and a 30 percent decline in first-class mail volume over the past decade, the Journal reported.

The proposed changes would reduce the amount of mail that is delivered within one day  and move it to a two-day time window to save the agency $750 million per year.

Under law, the USPS must be financially self-sustaining, but in 2012 it reached its $15 billion credit limit with the Treasury Department. The agency tends to have only enough cash-on-hand to fund several weeks of operations, and last week it posted a third-quarter loss of $1.96 billion despite revenue increases from higher postage rates.

The postal service said that the moves by lawmakers would further hamper its operations and undermine its ability to regain its financial footing. It has called for more financial flexibility.

Since reforms were launched in 2012, the postal service has already consolidated 141 mail processing facilities and a spokeswoman told the Journal in a statement that the move "was highly successful, resulted in negligible service impact, required no employee layoffs, and generates annual cost savings of approximately $865 million."

The USPS has previously said that closing additional facilities would allow it "to invest in new package sorting equipment and other upgrades."

The agency, however, said it needs to spend $10 billion over the next four years to upgrade delivery trucks and other infrastructure to accommodate the increase in its package businesses.

Meanwhile, for the fourth time this year, the agency will likely default on a $5.5 billion pre-funding requirement for it pension program which was established by Congress. The organization has previously called for removing the pre-funding requirement.

The senators said in their letter that the one-year suspension on the planned cuts would give the agency "the time it needs to enact comprehensive postal reforms that are necessary for the Postal Service to function effectively in the future," the Journal reported.

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