Post office pleads poverty to Congress
WASHINGTON — The post office will run out of money this year unless it gets help, Postmaster General John Potter told Congress on Wednesday as he sought permission to cut delivery to five days a week.
"We are facing losses of historic proportion. Our situation is critical," Potter told a House panel.
The agency lost $2.8 billion last year and is looking at more losses this year. Reducing mail delivery from six days to five days a week could save $3.5 billion annually, Potter said.
Potter also urged changes in how the post office prepays for retiree health care to cut its annual costs by $2 billion.
If the Postal Service does run out of money, the lingering question, Potter told the House Oversight post office subcommittee, is which bills will be paid and which will not. Ensuring the payment of workers’ salaries comes first, he said, but other bills may have to wait.
Potter first raised the possibility of delivery cutbacks in January, but the idea has not been warmly received.
"With the Postal Service facing budget shortfalls, the subcommittee will consider a number of options to restore financial stability and examine ways for the Postal Service to continue to operate without cutting services," subcommittee Chairman Stephen F. Lynch, D-Mass., said.
Lynch said the financial stability of the Postal Service is "critical to the American expectation of affordable six-day mail delivery payday loan."
Even if the agency succeeds in reaching its planned cuts of $5.9 billion, there could still be a $6 billion deficit in 2010, Potter said.
"Without a change we will exhaust our cash resources," he said. "We can no longer afford business as usual."
Asked whether layoffs would occur, Potter said it is possible but he hopes avoidable.
Last week, the post office said it planned to offer early retirement to 150,000 workers and is eliminating 1,400 management positions and closing six of its 80 district offices.
Dan Blair, head of the independent Postal Regulatory Commission, noted that Congress could consider appropriating money to help the post office.
The agency does not receive a taxpayer subsidy for its operations, although Congress subsidizes overseas voting and free mail for the blind.
William Young, president of the National Association of Letter Carriers, stressed in his testimony that the agency is not seeking a bailout, "but we are here to ask the Congress for help."