U.S. Postmaster General Patrick Donahoe asked a Senate committee Tuesday for relief as the ailing agency faces a looming $5.5 billion default on a mandated retirement fund payment at the end of the month.
Donahoe asked for legislation allowing the USPS to determine delivery frequency and streamline the process of gaining approval of product development and pricing changes. He also requested legislation to relieve the USPS of $5.5 billion in annual payments to prefund retirement health benefits; return $6.9 billion in federal employee payments; and allow the authority to revise the contribution retirement plan for new hires.
“The postal service is in a crisis today because it operates within a restrictive business model and has limited flexibility to respond to a changing marketplace,” Donahoe told the committee on homeland security and governmental affairs. “We need the ability to operate more as a business does. This applies to the way we provide products and services, allocate resources, configure our retail, delivery and mail processing networks, and manage our workforce.”
Donahoe's testimony essentially launched what could be a month-long effort by the USPS to redraw its the legislated mandates around its operations that prevent the postal service from making large-scale changes to meet changing demand, including reduced use of mail in an era of electronic communications.
The USPS has reduced its costs by more than $12 billion and shrank its workforce by 110,000 people in the last four years, Donahoe said. Still, the USPS needs more flexiblity if it is to reduce its annual costs by $20 billion by 2015 to return to profitability.
But Congress has resisted a USPS plan to eliminate Saturday delivery and efforts to close rural post offices that are poor financial performers have met resistance on Capitol Hill.