A Senate proposal to require the U.S. Postal Service to assume retirement costs would produce dire results -- including mail delays, shorter office hours, no Saturday deliveries, staff cuts, closed rural post offices and another postage rate hike -- agency executives said yesterday.

The disruptions could begin "almost immediately," said Deputy Postmaster General Michael Coughlin, noting that House and Senate negotiators are working this week on sorting out their differences over a budget bill that includes the measure.

"The plain truth is if this legislation is enacted, we would be unable to provide the level of service we have been working so hard to achieve," Postmaster General Preston R. Tisch said.

At issue is a Senate-passed deficit-reduction measure that would require the Postal Service to absorb nearly $2 billion in added costs for retirement benefits. The provision specifies that the agency cannot raise rates, borrow or increase its budget to cover the cost. Instead it would have to make specific cuts in service and capital construction budgets.

Tisch said the Postal Service is more than willing to take on the extra costs, but he said the problem occurs with the provisions specifying where the money must come from. That ties the agency's hands, preventing it from using cash reserves for operations and from borrowing money to continue capital construction, he said.

Tisch said the result of Senate "micromanaging" the agency could be to force it to make major cuts in service, since belt-tightening over the last few years has eliminated any excesses in the budget.

The Postal Service lost $223 million in the fiscal year that ended Sept. 30.

The retirement benefits under debate are medical care and cost-of-living expenses for former postal workers who retired before the agency became independent in 1974. The Postal Service covers the retirement costs of workers it has employed since then, but those who retired earlier had remained in the federal budget as former federal employes.

{Office of Management and Budget Director James C. Miller III charged that Postal Service estimates about cutbacks were vastly overstated in hopes of influencing action in Congress. "It acts as though the world is coming to an end," Miller told Knight-Ridder. "I find that outrageous."}

Possible major effects, according to Coughlin and Comer Coppie, assistant postmaster general for finance, include:

Delays in mail delivery because staff cuts would reduce the nighttime and weekend shifts that sort most mail.

Curtailed office hours for window service, eliminating Saturday hours and cutting back to six hours a day in many offices.

Seeking congressional permission to eliminate delivery on Saturdays.

Staff cuts and a hiring freeze. This could require elimination of thousands of jobs for part-time workers, totaling as much as the equivalent of 30,000 full-time positions from a current staff of 790,000.

Consideration of closing 10,000 to 12,000 small post offices, primarily in rural areas.

Another rate hike in 1990 of 3 cents or 4 cents for a first-class stamp, in addition to the 3-cent increase expected to occur in April.

An immediate halt to as many as 70 major construction programs nationwide as well as up to 500 projects to enlarge or improve smaller offices.

A delay or elimination of plans to purchase more automated sorting machinery and fuel-efficient, long-life postal vehicles.

In the worst case, an embargo on accepting certain mail: most likely third-class advertising mail.