Saturday service cut hinges on change to retiree benefits
As a pure business proposition, the U.S. Postal Service decision to end Saturday mail delivery this year makes sense. The agency claims it will save $2 billion by doing so (critics contend savings will be half of that or less), helping to stem its bleeding. In the last fiscal year, the service lost $15.9 billion while reaching its statutory borrowing limit and defaulting on its pension payment.
As a political proposition - well, that's a different matter.
Some members of Congress suggest they will introduce legislation to preclude the move because it adversely will affect residents or businesses, or both, in their districts.
Few members of Congress reacted with the urgency that is necessary to stabilize the USPS, however.
The business itself must adjust to the vast digital competition that has sapped much of its bread-and-butter business. To that end it has eliminated 193,000 jobs and consolidated 200 regional mail-processing centers.
On the revenue end, in recognition of its growing package-delivery business, the USPS said it would maintain that service on Saturdays.
But the USPS needs congressional action on financial matters not directly related to daily operations.
Last year the Senate passed a comprehensive bill in that regard but it died in the House.
The key issue is a requirement, unique among all federal agencies, that the USPS prepay its retiree health benefits 75 years in advance - or for some employees who might not have been born yet. That costs $5 billion a year and makes it impossible for the service to even approach solvency. It should be repealed.
Congress also should refund to the USPS about $11 billion in previous pension overpayments to help maintain its cash flow.
Even if the end of Saturday service is inevitable, the collapse of the USPS isn't if Congress does its job.