U.S. Postal Service cuts mean closures, slowdown of mail service
(AP, WJLA) — Unprecedented cuts by the cash-strapped U.S. Postal Service will slow first-class delivery next spring and, for the first time in 40 years, could eliminate the chance for stamped letters to arrive the next day.
The estimated $3 billion in reductions are part of a wide-ranging effort by the Postal Service to quickly trim costs and avert bankruptcy.
They could slow everything from check payments to Netflix's DVDs-by-mail, add costs to mail-order prescription drugs, and threaten the existence of newspapers and time-sensitive magazines delivered by postal carrier to far-flung suburban and rural communities.
It also means smaller post offices, like the 20th Street location in Dupont Circle, are more likely to be eliminated, and residents aren't too happy about those prospects.
"I think it will be an inconvenience," said Dan Snodderly, customer. "There's another one, but it's always crowded."
The cuts will close 252 of the 461 mail processing plants across the country as early as next March.
This also means cutting about 28,000 employees.
Kevin Martucci has been a letter carrier for more than 30 years. Changes have already begun affecting him.
"We're working 10-11 hours days. I want to get home," he said.
Because the consolidations would typically lengthen the distance mail travels from post office to processing center, the agency would also lower delivery standards for first-class mail.
And to raise revenue, the Postal Service has announced stamp prices will go up one penny to 45 cents beginning Jan. 22.
About 42 percent of first-class mail is now delivered the following day; another 27 percent arrives in two days, about 31 percent in three days and less than 1 percent in four to five days. Following the change next spring, about 51 percent of all first-class mail is expected to arrive in two days, with most of the remainder delivered in three days.
The consolidation of mail processing centers is in addition to the planned closing of about 3,700 local post offices. In all, roughly 100,000 postal employees could be cut as a result of the various closures, resulting in savings of up to $6.5 billion a year.
Expressing urgency to reduce costs, Postmaster General Patrick Donahoe said in an interview that the agency has to act while waiting for Congress to grant it authority to reduce delivery to five days a week, raise stamp prices and reduce health care and other labor costs. The Postal Service, an independent agency of government, does not receive tax money, but is subject to congressional control of large aspects of its operations. The changes in first-class mail delivery can be implemented without permission from Congress.
'Imminent default' faced on $5.5 billion debt
After five years in the red, the post office faces imminent default this month on a $5.5 billion annual payment to the U.S. Treasury for retiree health benefits; it is projected to have a record loss of $14.1 billion next year amid steady declines in first-class mail volume. Donahoe has said the agency must make cuts of $20 billion by 2015 to be profitable.
"We have a business model that is failing. You can't continue to run red ink and not make changes," Donahoe said. "We know our business, and we listen to our customers. Customers are looking for affordable and consistent mail service, and they do not want us to take tax money."
Separate bills have passed House and Senate committees that would give the post office more authority and liquidity to stave off immediate bankruptcy. But prospects are somewhat dim for final congressional action on those bills anytime soon, especially if the measures are seen in an election year as promoting layoffs and cuts to neighborhood post offices.
The Postal Service initially announced in September it was studying the possibility of closing the processing centers and published a notice in the Federal Register seeking comments. Within 30 days, the plan elicited nearly 4,400 public comments, mostly in opposition.