USPS retreats from plans to close post offices in rural areas

The cash-strapped U.S. Postal Service announced Wednesday that it will keep small post offices open with shorter hours as it tries to ensure rural access to mail services. 

Postal officials said the plan would balance the agency’s need to both serve customers and cut costs, and said the proposal would save about $500 million per year.

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“We think we ended up with a win-win here,” Postmaster General Patrick Donahoe told reporters. “We’ve listened to customers, listened to the communities that we serve, and we’re going to keep listening.”

Key lawmakers on Capitol Hill cautiously welcomed the Postal Service’s new plan to keep rural post offices open. Access to mail and postal services appears to be a potential area for common ground as Congress works toward enacting postal reform legislation.

Donahoe had hinted in recent weeks that the USPS was moving away from post office closures, which have been strongly opposed by some lawmakers.

“We’ve gotten a lot of concerns about the rural post offices, and the roles that they play,” Rep. Elijah Cummings (Md.), the top Democrat on the House Oversight Committee, told The Hill. “We’re very sensitive to that.”

Still, the annual savings from the agency’s new plan amount to just over 2 percent of the $22.5 billion that USPS is looking to shave from its yearly costs by 2016. 

At the same time, House and Senate sponsors of postal legislation continue to spar with one another, and the two chambers continue to propose broadly different methods to firm up the Postal Service’s finances.

On Wednesday, backers of the Senate legislation, which cleared the chamber last month, also suggested that the new proposal from the Postal Service underscored the need for the House to follow their lead and pass a bill. 

“Stopgap, piecemeal measures like the proposal offered today only address a small part of the problem and will not keep the Postal Service from an imminent collapse,” Sen. Tom Carper (D-Del.) said in a statement. “This plan does not address some serious issues that continue to drain the Postal Service’s finances every day.”

House Republicans and postal officials have said that the Senate bill does not contain enough cost-cutting to put USPS on solid ground in the long term.

Rep. Darrell Issa (Calif.), the sponsor of the GOP bill, said his measure would allow USPS to slash costs by altering retail access in more urban and suburban places.

“To achieve real savings creating long-term solvency, the Postal Service needs to focus on consolidation in more populated areas where the greatest opportunities for cost reduction exist,” Issa, the chairman of the House Oversight Committee, said in a statement. 

USPS, which currently loses roughly $25 million a day amid declining first-class mail volume, said last year that it was looking at roughly 3,700 post offices as part of its consolidation plans, and postal officials on Wednesday noted that nearly nine in 10 rural post offices lose money.

On Wednesday, the postmaster general stressed that the agency’s rural post office plan was just one part of its broader fiscal plan, but also said he hoped it would ease some of the concerns on Capitol Hill. 

“Then,” he added, “we can enable Congress to get back on the legislative plan and get postal legislation finished and signed by the president by this summer.”

Under the plan announced Wednesday, USPS would review operations for some 13,000 rural post offices, with input from the local community. The service has already reviewed another 4,500 rural post offices, and said those can stay open for full eight-hour days.

The other post offices could stay open for shorter hours, perhaps two to six hours at a time. Other options include merging a post office with a nearby branch or establishing a so-called “village post office” in a local retail store. 

Donahoe and Megan Brennan, the service’s chief operating officer, said the $500 million in savings would come from both the reduced hours and by switching some local postmasters from full time to part time, which would tamp down benefit costs. USPS will also offer retirement incentives to employees in rural areas. 

Additionally, the Postal Service has pushed to scrap Saturday delivery, shutter mail processing centers and provide its own healthcare benefits to employees.

The Senate legislation would ease the sting of a required prepayment for retiree healthcare that USPS currently faces, and would also allow the agency to seek new revenue streams and use a pension overpayment to incentivize current workers into retirement.

But the measure would also not allow the service to, among other things, move to five-day delivery as quickly as the House bill. 

The Postal Service’s new proposal on post offices came after rural lawmakers successfully pushed for stronger protections in the Senate bill, and lobbied for safeguards in the House.

Members from rural states had something of a wait-and-see attitude on the Postal Service announcement, with Rep. Adrian Smith (R-Neb.) saying that “USPS should be applauded for vetting alternatives, but it is in every stakeholder’s interest to look at the bigger picture and make more meaningful, long-term reform.”

“On its face, this move looks like an improvement over the previous proposal to flat-out close 150 post offices in West Virginia,” Sen. Jay Rockefeller (D-W.Va.) said in a statement. 

But even with the new approach on rural post offices, Donahoe has not given any indication that USPS will move away from its idea of consolidating scores of mail processing centers. The postmaster general said the agency would have an announcement on its next steps for the processing facilities next Thursday.

Lawmakers from rural states have expressed concern about closing down processing centers, and have joined colleagues in urging USPS to extend a moratorium on closing postal facilities that expires May 15.