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For now, Saturday delivery to stay

| Wednesday, April 10, 2013, 8:42 p.m.

WASHINGTON — The financially beleaguered Postal Service backpedaled on its plan to end Saturday mail delivery, conceding on Wednesday that its gamble to compel congressional approval had failed.

With limited options for saving money, the governing board said the agency should reopen negotiations with unions to lower labor costs and consider raising mail prices.

Yet, the board also said it's not possible for the Postal Service to meet its goals for reduced spending without altering the delivery schedule. Delaying “responsible changes,” the board said, only makes it more likely that the Postal Service “may become a burden” to taxpayers.

Congressional reaction was mixed, mirroring differences that have stalled a needed postal overhaul for some time. Some lawmakers had urged the agency to forge ahead with its plan, while others had said it lacked the legal authority to do so.

The Postal Service said in February that it planned to switch to five-day-a-week deliveries beginning in August for everything except packages as a way to hold down losses.

That announcement was risky. The agency was asking Congress to drop from spending legislation the longtime ban on five-day-only delivery.

Congress did not do that when it passed a spending measure last month.

“By including restrictive language ... Congress has prohibited implementation of a new national delivery schedule for mail and package,” according to the board.

Disappointed but not wanting to disregard the law, the board directed the Postal Service to delay putting in place the new delivery schedule until Congress passes legislation that gives the agency “the authority to implement a financially appropriate and responsible delivery schedule.”

The board made the decision in a closed meeting on Tuesday.

“This is good news for rural communities, businesses, seniors, veterans and others who depend on consistent and timely delivery of the mail,” said Sen. Bernie Sanders, an independent from Vermont.

But GOP Rep. Darrell Issa of California, chairman of the House Oversight and Government Reform Committee, bemoaned the decision to back away from a “delivery schedule that polling indicates the American people understand and support.”

Postal officials said that to restore the service to long-term financial stability, the agency must have the flexibility to reduce costs and come up with new revenues.

“It is not possible for the Postal Service to meet significant cost reduction goals without changing its delivery schedule — any rational analysis of our current financial condition and business options leads to this conclusion,” the board statement said.

An independent agency, the service gets no tax dollars for its day-to-day operations but is subject to congressional control. It lost nearly $16 billion last year — $11.1 billion of that because of a 2006 law Congress passed forcing it to pay into future retiree health benefits, something no other agency does.

Fredric Rolando, president of the National Association of Letter Carriers, called the idea of renegotiating labor contracts “insulting and unnecessary,” saying that suggestion “is yet another sign that the Postal Service needs new executive leadership.” He said Saturday delivery is critical to the Postal Service's future.

“Losing this competitive advantage would not only reduce mail volume and revenue — sending the USPS on a death spiral — but also would disproportionately affect small businesses, the elderly, rural communities, the one-half of the public that pays bills by mail and the many millions who lack access to reliable Internet service. And it would cost tens of thousands of jobs,” Rolando said.

The Postal Service is executing a major restructuring throughout its retail, delivery and mail processing operations. Since 2006, it has reduced annual costs by about $15 billion, cut its workforce by 193,000 or 28 percent, and consolidated more than 200 mail processing locations.

The idea to cut Saturday mail but keep six-day package delivery — a plan Postmaster General Patrick Donahoe estimated could save $2 billion — played up the agency's strong point.

Its package service is growing as more people buy things online, while the volume of letters sent has slumped with increased use of email and other Internet services.

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