Postmaster General and CEO Patrick Donahoe urged Congress on Monday to take a bold approach to reforming the U.S. Postal Service and to give the ailing agency flexibility to overhaul operations and become profitable again.
Donahoe says the USPS, which lost $5.1 billion in its last fiscal year, needs to cut some 120,000 workers, break labor agreements, close thousands of post offices, privatize its healthcare program and end Saturday delivery. USPS mail volume has plummeted 33 percent since 2006, and he said First Class mail, the agency’s most profitable line of business, is expected to decline 7 percent annually.
Donahoe said bills in the House and Senate and President Obama’s reform proposals don’t go far enough, but pooling elements of each would allow the USPS to adopt a “rational business model.”
“If passed today, either bill would provide at best one year of profitability, and at least a decade of steep losses,” Donahoe said Monday at the National Press Club. He said the current reforms would return the agency to profitability for only several years, and the USPS eventually would return to annual losses, which would rise to levels as high as $10 billion and $15 billion.
Donahoe’s proposal has been bitterly contested by agency’s two labor unions, whose member protested outside the press club building, chanting for the removal of Donahoe. Several protestors gained access to the press club and were able to interrupt Donahoe’ speech. The USPS chief quipped that at least “they've been paying attention to the situation.”
Donahoe said the USPS Sunday extended talks with the unions over new collective bargaining agreements until Dec. 7. He said the agency’s $5.5 billion retirement fund payment has been postponed until Dec. 18, but the removal of such payments and the return of a $11.4 billion overpayment to the fund is critical to the agency becoming solvent again.
Donahoe also said the USPS needs to more than halve its processing facilities to 200 sites by 2013. He said the agency islooking at way in which retail businesses could function as hybrid post offices and offset the thousands of existing facilities that are unprofitable.