White House to include Postal Service cuts in deficit-reduction plan

The Obama administration will include cost-cutting measures for the U.S. Postal Service as part of a broader deficit-reduction package it plans to submit to Congress, an administration official told lawmakers on Tuesday.

John Berry, the director of the Office of Personnel Management, also told a Senate committee that the administration would like to push back the deadline on a scheduled healthcare payment USPS must make for future retirees.

The Postal Service has already said that it would not be able to make that $5.5 billion payment by the current Sept. 30 deadline. Berry said the administration is seeking to delay that payment until year’s end, to help policymakers working to get the Postal Service on firmer financial footing.

Patrick Donahoe, the postmaster general, also told the Homeland Security and Government Affairs Committee that USPS needs to drastically change its business model, with the service on the cusp of default and facing a potential $10 billion deficit this fiscal year.

Berry did not specify what sort of USPS proposals the administration would put in its $1.5 trillion deficit-reduction plan. Donahoe has laid out a collection of ideas that he has labeled “radical,” including giving the service the authority to lay off tens of thousands of workers.

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