The U.S. Postal Service announced today that it would stop delivering mail on Saturdays in an effort to save $2 billion per year and shore up its finances. Politically speaking, this is a bold move. In the past, Congress has moved to prevent USPS from cutting back delivery to five days a week.
So why is the Postal Service going ahead with the plan anyway? Felix Salmon argues that the agency is desperately trying to get Congress's attention:
The [U.S. Postal Service] does actually have a detailed plan for becoming fully self-reliant over the next few years. Abolishing Saturday delivery is just one small part of that plan; all of it, by law, requires Congressional buy-in. ... The big problem is simple, but huge: Congress isn’t playing along, and instead is just making matters worse, unhelpfully micromanaging everything from postage rates to delivery schedules to health-care contributions. ...
Today’s announcement says to me that relations between the Post Office and Congress have deteriorated so much that the Post Office has given up on getting Congressional buy-in for its plans. At the same time, the plans are necessary (sufficient is a different question) if the Post Office is going to survive for decades to come. And so the Post Office is just going ahead with what needs to be done, and has decided to treat Congress as an adversary, rather than as a key partner in its evolution.
In a related vein, Annie-Rose Strasser points out that the U.S. Postal Service is currently in dire financial straits, in part, because of a law that Congress passed back in 2006 requiring the organization to pre-fund its pension plans for the next 75 years:
Under the Postal Accountability and Enhancement Act, Congress has for years forced the USPS to pre-fund 75 years’ worth of pensions for its employees, a requirement not made of any other public or private institution. That means that the Postal Service is footing the bill for employees it hasn’t even hired yet.
The USPS doesn’t actually receive money from the government, but still needs Congressional approval to make any changes to its structure. An analysis in July showed that the USPS, without its pension requirement, would have a $1.5 billion surplus.
But Congress has repeatedly failed to address the issue. Last year, the Postal Service defaulted on a pension fund payment for the first — and then second — time in its history, and political infighting stopped Congress from bringing any remedy to the floor.
For a more in-depth look at how the Postal Service is trying to become financially self-sufficient, check out this 10,000-word piece by Jesse Lichtenstein in Esquire.