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Postal Service Dropping Saturday Delivery? Not so Fast

(AP Photo)
Postmaster General John E. Potter is again pushing this week to eliminate Saturday delivery as a cost-cutting measure at the beleaguered United States Postal Service, which is projected to lose $7 billion this year.

But his effort faces a big roadblock in the form of the Postal Regulatory Commission (PRC) and Congress.

The PRC is an independent organization that regulates the Postal Service and would have to approve dropping a day from the delivery schedule. From there, Congress would have to agree to the change, since federal law mandates six-day delivery.

As I noted in a November story on the state of the Postal Service, PRC chair Ruth Y. Goldway has signaled that she has little interest in dropping Saturday service. In Congressional testimony in November, she said cutting a day of service could undermine "the vitality of the mail system" and threaten the postal monopoly.

"From a market perspective, the Postal Service could lose its greatest strategic advantage - ubiquity," she said. "Reducing service is detrimental to mail growth and to public perception of the value of the mail system."

She echoed those concerns this week, telling USA Today in response to news of the push to cut Saturday service that "the Postal Service is an essential part of the country's infrastructure, so you don't want to change it willy-nilly."

And then there's the question of getting the change through Congress – particularly the House, where a significant number of members represent rural districts where the postbox, even in the Internet age, is one of the only reliable connections to the outside world. Even in urban areas, a vote to cut Saturday service is not one lawmakers would be eager to make.

Potter knows all this, of course. But floating a cut to Saturday service puts additional pressure on lawmakers to do something to aid the Postal Service, which Potter says could lose $238 billion over ten years.

Instead of agreeing to a cut in Saturday service, Congress and the PRC are more likely to free the agency from a government-mandated requirement that it pay more than $5 billion per year into a fund to cover its retired employees' future health benefits over a ten-year period.

While that doesn't completely address the problem, it's a significant cost-cutting measure -- and one that doesn't have the potential cultural resonance that comes with a cut in Saturday service.

A rate increase is also likely, thanks to a legal loophole that allows for greater-than-inflation increases in extraordinary situations. U.S. postal rates are significantly lower than in most of the rest of the world.