Rule of thumb for governments with unhealthy debt-to-GDP ratios and trillions in unfunded liabilities. When a floundering federal agency offers to shave off some spending, take them up on it.
Postmaster General Patrick R. Donahoe announced in February they would be cutting Saturday service from the USPS six-day regimen, calculating the agency could save $2 billion annually. Donahoe cited the agency’s “urgent” financial situation:
Under the proposed cutback, the USPS still planned to continue six-day package delivery, which has increased by 14 percent since 2010, officials say. The delivery of letters and other mail, however, has declined substantially with the increasing use of email and other Internet services.
The Postal Service has suggested this change several times, but is always refused permission by Congress, which often asks USPS to improve its finances without giving it flexibility to do so. Even the allegedly drastic Ryan budget spares the Postal Service from vehicle fleet reductions imposed on other agencies despite the fact that mail volume has been steadily decreasing.
In November 2012, the USPS reported a net loss of $15.9 billion for the previous year. It defaulted on a $5.6 billion payment into its employees’ retirement health fund. It is forecasting a loss of $7.6 billion for the fiscal year that began last October.
In 2012 the USPS began a program to reduce costs by consolidating mail processing facilities. While that plan is proceeding, efforts to close post offices and to eliminate Saturday deliveries have hit political snags in Congress. An attempt to shut down up to 3,700 low-revenue post offices announced in 2012 was scaled back, instead resulting in reductions in operating hours for thousands of small rural locations.
[Rep. Blake] Farenthold (R-Texas) supports the Postal Service’s desire to halt Saturday delivery.
“I don’t understand why the Saturday delivery [plan] isn’t a no brainer. … The big argument against not delivering on Saturday was how do people who work Monday through Friday get their medications and packages. Postal Service came up with a brilliant solution and that is, ‘Hey look, we’re just not going to bring the junk mail on Saturday. We’re still going to bring the packages.'”
But the GAO had already ruled that the Postal Service didn’t have the right to cut Saturday delivery, so who knows if the plan would have gone into effect in August, even without this legislation. See how easy cutting spending is?
The federal Government Accountability Office ruled Thursday that the financially struggling United States Postal Service can not stop Saturday mail delivery as a cost-cutting measure.
Last month, the USPS announced that it would move to weekday-only mail service the week of Aug. 5, despite a provision in the 2012 Financial Services and General Government Appropriations Act requiring six-day and rural service.
The service says that provision is null and void because a continuing resolution passed by Congress in lieu of a federal budget bill doesn’t provide funding to make Saturday delivery financially feasible.
Sen. Claire McCaskill (D-Mo.) and Rep. Gerry Connolly (D-Va.) noted in a joint statement that they asked Postmaster General Patrick R. Donahoe in a letter six weeks ago to justify the postal service’s projected savings.
“The Postal Service has failed to deliver in responding to congressional requests in a timely and responsive manner,” Connolly said. “The postmaster general demands that Congress quickly rubberstamp the elimination of Saturday mail delivery — yet refuses to explain how cost-savings were calculated — apparently expecting members to evaluate his policy proposal from press materials alone.”
The Postal Regulatory Commission actually provided McCaskill with an answer and an updated accounting, in this letter, but whatevs.