Postmaster General Louis DeJoy on Tuesday unveiled a proposal to overhaul the U.S. Postal Service, describing his 10-year plan as necessary to stanch billions of dollars in losses and put the agency on the path to profitability. But critics are voicing concerns about key elements of the plan, including slower delivery standards and planned closures of some postal offices.
DeJoy said the plan will "erase" a projected $160 billion loss over the next decade by boosting revenue through expanded parcel delivery and potential postage hikes. Other savings would require action by Congress to change requirements for pre-funding retiree pension obligations and by integrating the postal service's retiree health care coverage with Medicare.
Notably, the plan would slow the USPS' delivery standard for mail to six days. Currently, the standard is three-day delivery for any destination within the continental U.S.
The plan comes as the USPS is already struggling with deliveries as well as with consumer complaints about mail that arrives days or weeks later than expected. At the same time, more Americans than ever are relying on the postal service given the ongoing, which has boosted demand for ecommerce and mailed deliveries of prescription drugs and other essentials.
Although critics and supporters alike note that the post office needs an overhaul, some expressed concern about the impact of slower delivery standards.
"Sending a piece of mail should not be a game of chance, and that's what's happening with the USPS, unfortunately, right now," Rep. Raja Krishnamoorthi, a Democrat from Illinois, told CBS News' Kris Van Cleave. "And unfortunately, people are starting to shift some of their habits to work around the mail. So they're emailing documents and they're basically reducing their reliance on the mail, which long term is a disaster."
Krishnamoorthi said he already receives emails and texts from his constituents about their concerns with delayed medications, Social Security checks and bill payments for small businesses. "That's a catastrophe for them," he added.
But DeJoy described the plan as necessary for the long-term survival of the postal agency.
"If not addressed, not only will our service continue to deteriorate, but we forecast we will lose $160 billion over the next 10 years," he said during a video call to discuss the plan. "Before that, we will run out of cash and not be able to continue without a bailout. We are not for that."
If the plan is enacted, the USPS could break in 2023 and report a "modest profit" in subsequent years, said USPS Chief Financial Officer Joseph Corbett.
Postal workers have "deep concerns"
The USPS wants to change its delivery standard by aiming to deliver any piece of mail within six days. But postal service officials said on the call that seven of 10 pieces of mail would still be delivered within the current three-day service standard.
Instead, mail delivered to the "fringes of our network" would require up to six days to delivery, said Kristin Seaver, chief retail and delivery officer for the postal service. Mail that travels from coast to coast could take five days to deliver, with the USPS adding an extra day of delivery as a cushion for such deliveries, she added.
The American Postal Workers Union expressed "deep concerns" about the slower delivery standards, as well as other changes.
"At a time that the public is demanding faster delivery of mail and packages, proposals that would slow the mail and reduce retail services — such as changing service standards, plant consolidations and reducing operating hours at post offices — will only have a negative effect on postal workers and the public," the union said in a statement.
In arguing for the change, the USPS noted that its delivery standards have declined in recent years. "In particular, we have not met first-class mail service targets in eight years," the Delivering for America Plan states. "This is due to both unattainable service standards and a lack of operational precision."
Closing postal offices
The plan also calls for consolidating some postal offices that receive "low traffic" into full-service retail postal offices, although it didn't specify which offices might face closure. It also plans to "further align Post Office hours of operation to local use" and potentially raise postage rates, although DeJoy said there are no specific plans in place for the latter.
Last fall, the USPS said it would keep the price of a "forever" stamp — and the first-class letter rate — at 55 cents for 20201, while other first-class mail rates were to rise 1.8% and alternate categories of mail were to cost 1.5% more.
Cutting services and delivery standards isn't the right way to improve the postal service, Krishnamoorthi said.
"When they talk about a turnaround, it doesn't mean that, you know, what is going up should go down," he said. "We have to talk about how do we take what's best about the USPS, amplify it and then what is not going well, change that part. And unfortunately, Mr. DeJoy is doing the opposite right now."
—With reporting by CBS News' Kris Van Cleave.