White House seeks cuts to USPS services in budget

President Obama would allow the cash-strapped U.S. Postal Service to scrap Saturday delivery and delay some required healthcare payments, under proposals in the White House’s 2015 budget.

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Obama’s previous budgets have had similar ideas for how to shore up USPS, which lost $5 billion in fiscal 2013. But several of the proposals floated by Obama have also generally been embraced more by Republicans than Democrats and postal unions.

Organized labor and many Democrats on Capitol Hill pushed back on the Postal Service’s push to keep only Saturday delivery of packages last year, an idea embraced by the top Republicans working on postal reform.

Obama’s budget would allow USPS to scrap all Saturday delivery – even packages, one of the most rapidly growing parts of the Postal Service’s business. USPS in recent months has shown more interest in expanding when it delivers packages, with Sunday delivery now in limited areas.

The White House budget would also allow USPS to move away from door-to-door delivery to more centralized delivery areas, an idea also panned by Democrats. Plus, USPS could keep a recent temporary increase in the price of stamps – which large mailers loathe – beyond the scheduled two years.

Finally, USPS would be allowed to skip a required prepayment for future retiree healthcare in 2014, and only pay half in 2015 and 2016 – thus saving the agency about $9 billion. Defaults on those required prepayments have caused most of the Postal Service’s red ink over the last two years.

“Together, these reforms would set USPS on a sustainable business path, providing it with over $20 billion in cash relief, operational savings and revenue through 2016,” according to the appendix to the president’s budget.

Much of the president’s budget is essentially a non-starter with Republicans on Capitol Hill, but his postal reform suggestions could play a role if the debate over revamping USPS heats up this midterm election year.

“I also appreciate the president’s continued support for postal reform, and welcome his budget’s inclusion of a number of key principals in the bipartisan Postal Reform Act that was approved by our committee last month, including the more accurate calculation of postal retirement costs, the restructuring of the postal service’s retiree health benefit payments, and the permanent extension of the exigent rate increased authorized by the Postal Regulatory Commission in December 2013,” Sen. Tom Carper (D-Del.), the chairman of the Homeland Security Committee, said in a statement.

But the president of one postal union complained that the president’s budget “simply misses the mark” when it came to USPS, and that “elected officials continue with misguided and unacceptable attempts to slash and eliminate service.”

“Our Postal Service is in need of true reform, not ill-advised, counter-productive attempts to slash service,” said Jeanette Dwyer of the National Rural Letter Carriers’ Association, who pointed to bipartisan support for keeping six-day delivery.