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Obama’s budget plan backs ending Saturday mail, other Postal Service changes

By Ed O’Keefe,February 14, 2012

President Obama’s budget proposal supports allowing the U.S. Postal Service to end Saturday mail deliveries, raise the price of stamps above the rate of inflation and recalculate how it plans to pay for the future retirements of postal workers.

The budget proposals mirror plans Obama presented to the fiscal “supercommittee” in September that the panel didn’t adopt.

Although the Postal Service is a self-funding entity that doesn’t use taxpayer dollars to pay for its operations, it is a significant piece of the unified federal budget because its workers and retirees draw benefits from federal workers’ compensation, retirement and health-care accounts.

Postal Service officials said last week that the agency lost $3.3 billion in the quarter that ended in December. While the Postal Service generated $200 million in profit from mail deliveries, $3.1 billion in obligations required by law to prefund future worker retirements — a charge unique to USPS — offset the gains and resulted in the overall loss.

In the budget plan released Monday, the White House proposed relaxing those payments by allowing the Postal Service to include fewer employees in the payments and to make the payments over a longer period of time. Obama also backed an end to Saturday mail deliveries and proposed granting USPS the authority to raise the price of stamps beyond the rate of inflation, if necessary. Obama also would refund $10.9 billion to USPS over two years from a credit it has with the Federal Employee Retirement System.

If enacted, the White House said the proposals would help USPS save $25 billion in the next 11 years.

In a statement, Postmaster General Patrick R. Donahoe thanked the White House for supporting “helpful recommendations to stabilize the Postal Service’s financial crisis.”

“We look forward to working with the White House and Congress on specific proposals that involve the Postal Service,” Donahoe said.

But when those discussions will begin in earnest remains unclear.

Competing proposals in the House and Senate have sat dormant in recent weeks despite warnings by USPS that it could begin to face a serious fiscal shortfall as early as the spring.

Sen. Thomas R. Carper (D-Del.), who is leading the push to pass a bipartisan Senate proposal, said the White House plan included several proposals in his bill.

“We can’t let the Postal Service fail on our watch,” Carper said Monday. “Congress and the administration are in agreement that key reforms and resources are necessary if we hope to help the Postal Service recover and thrive.”

Rep. Darrell Issa (R-Calif.), who is sponsoring a House GOP postal reform bill, said Obama’s proposal “lacks the necessary comprehensive approach to restore the Postal Service to solvency.”

Issa agreed that ending Saturday mail delivery is necessary, but he added that “infusing the agency with cash and hiking postage rates without requiring USPS to reduce costs and realign itself to meet America’s changing use of mail is just buying a very small amount of time with a very big check.”