Trying to Stem Losses, Post Office Seeks to End Saturday Letter Delivery
By RON NIXON

WASHINGTON — Faced with billions of dollars in losses, the Postal Service announced on Wednesday that it would seek to stop Saturday delivery of letters, a sweeping change in mail delivery that immediately drew criticism from postal unions, some businesses and lawmakers.

The post office said a five-day mail delivery schedule would begin in August and shave about $2 billion a year from its losses, which were $15.9 billion last year. The Postal Service would continue to deliver packages six days a week, and post offices would still be open on Saturdays. Reducing Saturday delivery is in line with mail services in several other industrialized countries like Australia, Canada and Sweden, which deliver five days a week.

The move raised immediate legal questions on Capitol Hill, where some lawmakers claimed that the Postal Service could not change its delivery schedules without Congressional approval. The post office has made earlier attempts to change the law, only to meet with objections or delays in Congress. Now, seizing a moment when the post office believes the law no longer applies, it moved on its own to shut down Saturday letter delivery.

Whether it will succeed is difficult to predict. Many lawmakers view the Postal Service as the quintessential government service that touches constituents almost every day, and rigidly oppose any changes. Also, postal worker unions hold sway over some lawmakers who are influential in writing legislation that governs the agency.

Whether the post office is ultimately blocked by an act of Congress or it tries to move ahead with ending letter delivery on Saturdays, the announcement on Wednesday moves postal overhaul legislation — which had stalled for many months — up the Congressional agenda.

“Our financial condition is urgent,” said Patrick R. Donahoe, the postmaster general, at a news conference announcing the change. “This is too big of a cost savings for us to ignore.”

Mr. Donahoe said the move to end Saturday delivery was part of a long-term plan to return the agency to profitability. Since 2010, the agency has continued to close post offices, reduce hours at many small, rural offices and cut staff. It also announced plans to sharply reduce the number of its regional processing plants. Last month, the agency raised the price of a first-class stamp to 46 cents, the latest in a series of generally annual postage increases.

But post office officials say the cuts, rate increases and staff reductions are not enough to make up for the two reasons it is losing money. One is a requirement that it pay nearly $5.5 billion a year for health benefits to future retirees, a mandate imposed on no other government agency. Second, since 2007, first-class mail volume has declined by 37 percent as use of e-mail and online payment services has soared.

The agency said eliminating Saturday mail service represented a substantial cost savings because of fewer staff hours and less equipment needed to maintain the deliveries.

The Postal Service also said the rise in online retail purchases and other e-commerce was contributing to its increase in that area and was why it would continue to deliver packages on Saturdays.

Since 1981, a Congressional mandate has required the Postal Service to deliver mail six days a week. But on Wednesday the agency argued that since the current stopgap budget measure for the entire government, known as a continuing resolution, did not contain language explicitly mandating six-day delivery, the agency could make the changes without Congressional approval.

But some members of Congress immediately questioned the Postal Service’s claim.

“The passage of the continuing resolution did not suspend that language, as they claim, but in fact extended it,” said Representative José E. Serrano, Democrat of New York and ranking member on the appropriations subcommittee on financial services and general government, which has jurisdiction over the post office. “Rather than use very dubious legal arguments to end Saturday delivery, the U.S.P.S. should work hand in hand with Congress to come up with a successful restructuring and reform package that allows them to become more efficient while maintaining vital services like Saturday delivery.”

Senator Thomas R. Carper, Democrat of Delaware, who led a bipartisan effort to pass a postal overhaul bill last year, called the post office decision disappointing. But he added, “Despite my disappointment, it’s hard to condemn the postmaster general for moving aggressively to do what he believes he can and must do to keep the lights on at the Postal Service, which may be only months away from insolvency.”

Last April, the Senate passed a bill that provided early retirement incentives to about 100,000 postal workers, or 18 percent of its employees, and allowed the Postal Service to recoup more than $11 billion it overpaid into an employee pension fund. The Senate bill did not stop Saturday deliveries immediately, but it would have allowed the agency to consider the issue in two years.

But the House did not act on its own postal bill, which would have allowed the post office to end Saturday delivery. As a result, postal legislation did not advance in Congress.

The new Congress is set to begin work on a postal bill, but it is unclear when the legislation will be taken up as lawmakers work to avert a series of across-the-board spending cuts scheduled to take place in March.

Congress could prohibit any mail delivery changes in the next spending measure. A Senate hearing on postal operations is scheduled for next week, and Congressional aides said postal officials would be questioned about their plans and authority to end Saturday letter delivery.

Most Americans support ending Saturday mail delivery. A New York Times/CBS News poll last year found that about 7 in 10 Americans said they would favor the change as a way to help the post office deal with billions of dollars in debt. The Obama administration also supports a five-day mail delivery schedule.

But three postal unions and some businesses on Wednesday called the move to five-day delivery misguided.

“Postmaster General Patrick Donahoe’s plan to end Saturday delivery is a disastrous idea that would have a profoundly negative effect on the Postal Service and on millions of customers,” said Fredric Rolando, president of the National Association of Letter Carriers. “It would be particularly harmful to small businesses, rural communities, the elderly, the disabled and others who depend on Saturday delivery for commerce and communication.”

Many companies said ending Saturday delivery would have a devastating effect on their businesses.

The American Forest and Paper Association, whose members include the paper and packaging industry, said a five-day delivery schedule would only deepen the agency’s financial problems.

“The U.S. Postal Service’s decision to eliminate six-day mail delivery is a shortsighted solution with questionable financial savings and will only drive volume out of the system, stripping both the U.S.P.S. and businesses that depend on the mailing industry of potential revenues,” said Donna Harman, president and chief executive of the trade association.