Stop Saturday Mail Delivery? Post Office Honchos Disagree

The head of a U.S. Postal Service advisory panel said Thursday the post office should find other ways to trim costs before turning to significant cuts in service such as halting Saturday deliveries.

Ruth Y. Goldway, chairwoman of the independent Postal Regulatory Commission, also questioned a plan to put postal kiosks and mini-offices in markets and office supply stores. "Ask the small towns of America if they think government business should be conducted in Wal-Marts," she told the House Committee on Oversight and Government Reform.

But Postmaster General John Potter, architect of a cost-savings plan, stuck to his guns, the Associated Press reported. "We stand on the brink of insolvency," Potter said in testimony before the committee. "The way Americans communicate has changed dramatically and we've got to change with it."

The independent, self-supporting agency lost $3.8 billion last year and faces larger losses in 2010 as its costs rise and more Americans do business by e-mail.

But Goldway said the Postal Service is carrying a huge benefits burden that has little to do with the services it provides. Over the past three years, she said, the Postal Service has been forced to pay out $15.4 billion to "pre-fund future retiree health benefits" -- payments not required of other federal agencies, according to word the AP received from the Government Accountability Office. "Borrowing by the Postal Service to make the payments does not make sense," Goldway said.

Congress would have to let the Postal Service off the hook on the pre-funding, just as it would have to permit any halt in Saturday mail deliveries. Potter said relief from the early payments would help in the short run, but would not eliminate the long-term outlook for declining revenues. Goldway argued that the Postal Service "should reposition its goals to meet the needs of an evolving society," rather than starting off with the idea of cutting back the size and scope of valued services.

In making the case for a five-day delivery schedule earlier this year, the Postal Service emphasized that most post offices would remain open on Saturdays.