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Reality Check: Postal hike

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(FOX19) -

On Monday, the cost of a first-class postage stamp jumps from 46 to 49 cents, a six percent increase. The two-year price hike is projected to raise nearly $3 billion, but did you know that just one cost-cutting measure could save the ailing Postal Service $2 billion dollars annually and it wouldn't cost you a penny?

The Postal Service operates as a legitimate business without relying on taxpayers. However, it's a failing business, losing millions every day.

Last fall, the USPS defaulted on a $5.6 billion retiree health benefits payment. This was the third time it has failed to meet its obligations.

In an effort to stem its massive losses, Postmaster General Patrick Donahoe has been pushing a bold move - cutting Saturday deliver permanently.

"The key thing is this. The Postal Service needs to make serious change," says Donahoe. "We need to address a number of issues, six to five days of letter mail to save two billion dollars."

The USPS is facing strong opposition, starting with the Postal Union. The newly elected president is rallying his membership to fight for Saturday service.  

Then there's Congress, which has the final say on any change in delivery and has repeatedly refused to allow the Postal Service to drop Saturday Service.

U.S. Representative Elijah Cummings, who sits on the committee that funds the USPS, says ending Saturday delivery means the elimination of up to 30-thousand employees, many of those Asian, African-American, and Hispanic, who make up about 40 percent of all Postal Service employees.

How do the American people feel about Saturday mail delivery? According to a New York Times/CBS survey, seven in ten people say they would be just fine without it. This might have something to do with the fact that most of us don't rely on the Postal Service as much as we used to. The same survey finds only 38 percent of people use the Postal Service all the time. For those 45-years-old and younger, the decline is even more dramatic - just three in ten use the Postal Service regularly.

The Postal Service recently released its five year business plan, which includes other cost-cutting measures like dropping its current healthcare plan, reducing its workforce by 150-thousand employees by 2015, and the closure of thousands of smaller branches. But while we wait for those measures to kick in we're still stuck paying 3-cents more for stamps starting on Monday.

***CORRECTION TO THIS STORY: The House Oversight Committee does not in fact "fund" the Postal Service. The money that is appropriated to the USPS from Congress is a refund for services provided the previous year.

Sources:  

http://about.usps.com/strategic-planning/five-year-business-plan-2012-2017.pdf

http://www.nytimes.com/2013/02/07/us/postal-service-plans-to-end-saturday-delivery.html?pagewanted=2&_r=1

http://www.pbs.org/newshour/bb/government_programs/jan-june13/postoffice_02-06.html

http://thehill.com/blogs/blog-briefing-room/news/282067-cummings-postal-service-cuts-would-hurt-minority-groups

http://www.nytimes.com/2013/02/13/us/saturday-mail-delivery-cut-is-subject-of-senate-hearing.html

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