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Wednesday, February 6, 2013

Postal Service to Stop Delivering on Saturdays

Posted by Paul Constant on Wed, Feb 6, 2013 at 9:59 AM

Even though they don't have any right to do this, the United States Postal Service has announced that they'll stop delivering letter mail on Saturdays. Package service will continue. (Congress is supposed to approve all these delivery changes, but somehow the USPS believes they can make it work without Congress this time around.) Before anyone gets all "nobody-needs-mail-anymore" in the comments, I would like to highlight this passage from the Huffington Post story, which explains why this service cut is a response to a completely manufactured problem:

The agency's biggest problem – and the majority of the red ink in 2012 – was not due to reduced mail flow but rather to mounting mandatory costs for future retiree health benefits, which made up $11.1 billion of the losses. Without that and other related labor expenses, the mail agency sustained an operating loss of $2.4 billion, lower than the previous year.

The health payments are a requirement imposed by Congress in 2006 that the post office set aside $55 billion in an account to cover future medical costs for retirees. The idea was to put $5.5 billion a year into the account for 10 years. That's $5.5 billion the post office doesn't have.

No other government agency is required to make such a payment for future medical benefits. Postal authorities wanted Congress to address the issue last year, but lawmakers finished their session without getting it done. So officials are moving ahead to accelerate their own plan for cost-cutting.

Dropping Saturday service is a big mistake that will make the USPS seem more irrelevant than it is. This is a bad move down the wrong path. (Unless this is all some sort of a poker-faced political maneuver to force Congress into dropping the future health benefit requirement, in which case it's maybe a genius move. But I wouldn't bet on that.)

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