Gary Diamond
03-26-2009, 12:38 AM
The high fuel prices of last year also sapped money from the post office, which operates more than 200,000 vehicles. Every one-cent increase in the price of fuel costs the post office $8 million.
Without Help, Postal Service Faces Threat of Going Broke, Official Says
By THE ASSOCIATED PRESS
WASHINGTON (AP) — The Postal Service will run out of money this year unless it gets help, the postmaster general, John E. Potter told Congress on Wednesday as he sought permission to cut delivery to five days a week.
“We are facing losses of historic proportion,” Mr. Potter said. “Our situation is critical.”
The agency lost $2.8 billion last year and is facing the likelihood of much larger losses this year, despite a rate increase scheduled to take effect May 11. Reducing mail delivery to five days a week from six could save $3.5 billion annually, Mr. Potter told the post office subcommittee of the House Committee on Oversight and Government Reform.
He also urged changes in how the post office prepays for retiree health care to cut its annual costs by $2 billion.
Even if the agency reaches its planned cuts of $5.9 billion this year, there could still be a $6 billion deficit in 2010, Mr. Potter said.
“Without a change, we will exhaust our cash resources,” he said. “We can no longer afford business as usual.”
The volume of mail handled by the post office has been declining for some time, and the recession is making the situation worse. If there is no economic recovery, the agency projects that volume for the year will drop by 12 billion to 15 billion pieces of mail.
The high fuel prices of last year also sapped money from the post office, which operates more than 200,000 vehicles. Every one-cent increase in the price of fuel costs the post office $8 million.
Mr. Potter first raised the possibility of delivery cutbacks in January, but the idea has not been warmly received in Congress. Federal law now requires delivery six days a week.
Last week, the post office said it planned to offer early retirement to 150,000 workers and was eliminating 1,400 management positions and closing 6 of its 80 district offices in cost-cutting efforts. Mr. Potter said he expected 10,000 to 15,000 workers to accept the early retirement offer.
Without Help, Postal Service Faces Threat of Going Broke, Official Says
By THE ASSOCIATED PRESS
WASHINGTON (AP) — The Postal Service will run out of money this year unless it gets help, the postmaster general, John E. Potter told Congress on Wednesday as he sought permission to cut delivery to five days a week.
“We are facing losses of historic proportion,” Mr. Potter said. “Our situation is critical.”
The agency lost $2.8 billion last year and is facing the likelihood of much larger losses this year, despite a rate increase scheduled to take effect May 11. Reducing mail delivery to five days a week from six could save $3.5 billion annually, Mr. Potter told the post office subcommittee of the House Committee on Oversight and Government Reform.
He also urged changes in how the post office prepays for retiree health care to cut its annual costs by $2 billion.
Even if the agency reaches its planned cuts of $5.9 billion this year, there could still be a $6 billion deficit in 2010, Mr. Potter said.
“Without a change, we will exhaust our cash resources,” he said. “We can no longer afford business as usual.”
The volume of mail handled by the post office has been declining for some time, and the recession is making the situation worse. If there is no economic recovery, the agency projects that volume for the year will drop by 12 billion to 15 billion pieces of mail.
The high fuel prices of last year also sapped money from the post office, which operates more than 200,000 vehicles. Every one-cent increase in the price of fuel costs the post office $8 million.
Mr. Potter first raised the possibility of delivery cutbacks in January, but the idea has not been warmly received in Congress. Federal law now requires delivery six days a week.
Last week, the post office said it planned to offer early retirement to 150,000 workers and was eliminating 1,400 management positions and closing 6 of its 80 district offices in cost-cutting efforts. Mr. Potter said he expected 10,000 to 15,000 workers to accept the early retirement offer.