Postmaster General Patrick Donahoe. (File/UPI/Roger L. Wollenberg) | License Photo
The U.S. Postmaster General on Wednesday renewed the push for a five-day delivery schedule for first-class mail. The Postal Service backed off a plan to end Saturday delivery earlier this year after backlash from lawmakers.
"The Postal Service continues to face systemic financial challenges because it ... does not have the legal authority to make the fundamental changes that are necessary to achieve long-term financial stability," Postmaster General Patrick Donahoe told the House Oversight and Government Reform Committee.
Sales of stamps and other products -- not taxpayer dollars -- fund operations at the semi-independent Postal Service.
A 2006 congressional mandate to prefund up to 75 years of its future retirees' healthcare, along with a steep decline in revenues on stamps and other products, have led to heavy losses.
last year, the U.S.P.S. lost $16 billion. First-class mail, its most profitable service, saw revenue drop by $198 million in the second quarter of 2013. The Postal Service expects to default on a $5.6 billion payment to the healthcare fund due in September.
"We cannot pretend these marketplace changes aren't happening or that they don't require us to make fundamental changes to our business model." Donahoe said. "We need legislation that, together with our planned changes, confidently enables at least $20 billion in savings by 2016. If not, we go over the edge."
Donahoe proposed a five-year plan that seeks to eliminate the retiree prefunding requirement and allow the Postal Service to control its own healthcare system.
The plan also includes switching to a five-day delivery schedule for first-class mail. Packages would still be delivered on Saturdays.
Oversight Committee Chairman Darrell Issa of California supports the five-day delivery schedule.
But Representative Elijah Cummings, the top Democrat on the committee, has introduced a bill that would retain both the retiree healthcare fund and six-day delivery.
The bill would allow the Postal Service to provide non-postal services, such as check-cashing or public Internet access, in order to raise revenues.
The bill would also create a "chief innovation officer" to help the Postal Service develop new, competitive products. In the meantime, the bill would delay the next payment into the healthcare prefund until 2017.