USPS will see pushback from industry, unions on delivery day reduction

The U.S. Postal Service will face opposition from consumers and its employees if it eliminates Saturday delivery, panelists told lawmakers on Wednesday.

During a joint hearing before the Senate Homeland Security and Governmental Affairs Subcommittee on Federal Financial Management and the House Oversight and Government Reform Subcommittee on the Federal Workforce, representatives from industry stakeholders and employee unions said a reduction in delivery days would hurt USPS' workforce and limit the American public's ability to receive important mail in a timely manner.

"If we go to five-day delivery, tens of thousands of employees will be without a job, without a livelihood," said Don Cantriel, president of the National Rural Letter Carriers Association.

The Postal Service has proposed eliminating Saturday delivery to address its fiscal problems. It is the only federal body required to prefund its retiree health benefits at a cost of more than $5 billion annually, and its inspector general this spring found that USPS had overpaid its pension fund by $75 billion. In addition, contract negotiations with labor unions have not taken into account the Postal Service's financial situation, a move that Sen. Tom Coburn, R-Okla., called "idiocy at its best."

USPS has predicted losses of $238 billion during the next decade, though Postmaster General John Potter has said that total is theoretical and could be much less.

"It's a matter of public record that the $238 billion is a scare tactic to get us to make some decisions," said Rep. Gerry Connolly, D-Va. "At some point it is self-defeating for a business to cut core services and expect to remain viable."

Lawmakers grilled representatives from nonprofits and corporations that use the Postal Service about the impact of a reduction in delivery days from six to five and postal rate increases. Paul Misener, vice president of public policy at Amazon, reported his company would shift one-sixth of its business to other carriers if USPS eliminated Saturday delivery, while Andrew Rendich, chief service and DVD operations officer at Netflix Inc., said his company would support the reduction as part of a larger reform package.

"I know of no business trying to compete by raising prices and degrading service," said Donald Hall, president and chief executive of Hallmark Cards Inc.

The Postal Service in March filed its five-day delivery strategy with the Postal Regulatory Commission. Provisions in the plan would eliminate the equivalent of 40,000 full-time positions at a savings of $2.7 billion. Lawmakers had mixed opinions of the plan's impact on the USPS workforce.

The agency has too large a workforce, said Subcommittee Chairman Sen. Tom Carper, D-Del. "At a time when the pace of electronic diversion is likely picking up, we probably can't rely for very much longer on customers' willingness to continue paying for a postal system that seems in many ways to be much larger than we need," he said.

But Rep. Stephen Lynch, D-Mass., chairman of the House subcommittee, said he was concerned about the "downward spiral" that would occur if the Postal Service moves to five-day delivery and lays off part-time employees.

Rep. Jason Chaffetz, R-Utah, said he was opposed to eliminating Saturday delivery and planned to introduce legislation that would allow the agency to cut up to 12 days of delivery annually.

"What is absent from this discussion is how the Postal Service is going to become more relevant in people's lives," he said. "Let's talk about how to cut cost, but let's also talk about relevancy in the future."