Undelivered Savings

Postal Service backtracks on commitment to change delivery schedule, prompting oversight hearing

April 15, 2013

The House Committee on Oversight and Government Reform will hold a hearing on Wednesday in response to the Postal Service’s announcement last week that it will not go forward with a cost-cutting modification to its delivery schedule.

The United States Postal Service (USPS) backtracked on Wednesday, April 10, on its pledge to modify its delivery schedule after its Board of Governors’ met on April 9. Committee Chairman Darrell Issa (R., Calif.), long a champion of Postal Service reform, announced the next day his intention to hold a full committee hearing on reforms to aid the financially strapped postal delivery service.

"The Postal Service’s decision to first pursue modified Saturday delivery and then renege on its cost-cutting plan has seriously set back efforts to advance postal reform legislation," Issa said when announcing the hearing.

He promised "to review a wide variety of options to bring the troubled agency back from insolvency."

USPS lost about $15.9 billion during fiscal year 2012, according to a Postal Service spokesman. The spokesman attributed the service’s financial woes to declining mail use and the requirement that the service pre-fund retiree health benefits.

USPS announced in February that it would deliver mail on a modified schedule that cut back regular mail delivery to five days instead of six. The modification would save the service about $2 billion each year, the service noted in its announcements.

However, on April 10 the service said it did not have the legal authority to make the change, citing the Continuing Resolution that Congress passed in March. The resolution allows the government to continue to operate at current levels.

"By including restrictive language in the Continuing Resolution, Congress has prohibited implementation of a new national delivery schedule for mail and packages, which would consist of package delivery Monday through Saturday and mail delivery Monday through Friday," the Postal Service’s statement said.

The resolution contained, as have all past budgets and continuing resolutions since 1984, a provision that the Postal Service is to deliver mail on six days if it is to receive an annual reimbursement for certain services it provides.

Issa argued before Congress passed the funding resolution that this language did not prevent the USPS from implementing the changes.

"As the chairman of the authorizing committee, I want to clarify that … this provision would not prohibit the postal service from implementing this plan of modified 6-day delivery service," Issa said on the House floor.

The Postal Service could have asked the Office of Management and Budget to request a modification to the Continuing Resolution quite easily by noting an "anomaly," said Oversight Committee staff member Ali Ahmad.

A Postal Service spokesman did not answer a question about whether the agency asked the Office of Management and Budget to seek to remove the provision. The USPS said because the Postal Service did not receive any funds from the Continuing Resolution, the provision in the resolution did not apply to it.

The proposal to modify the delivery schedule encountered resistance from other lawmakers, with Rep. Gerry Connolly (D., Va.) ultimately asking the Government Accountability Office (GAO) to provide an opinion on whether the provision still held. The GAO argued that the provision requiring six-day delivery did indeed still apply to the Postal Service.

Groups opposed to the new schedule praised the Postal Service’s decision not to go through with the changes, citing the legal barrier.

"We believe that the USPS board of governors properly abided by the legal findings of the GAO," said a spokesman for the National Association of Letter Carriers, the labor union most affected by the changes.

However, the report did not deem the schedule modifications illegal—it simply noted that the provision in the resolution still applied, Ahmad said.

The report explicitly said in a footnote that it does not provide an opinion on whether the modifications comply with the provision.

Issa lamented the Postal Service’s decision to renege on its commitment to cut back on six-day delivery.

"Just a few months ago, when USPS announced that it would alter Saturday delivery service, it made no mention that this change could only occur if Congress eliminated an old and well-known provision of law. Despite some assertions, it’s quite clear that special interest lobbying and intense political pressure played a much greater role in the Postal Service’s change of heart than any real or perceived barrier to implementing what had been announced," he said in a statement on the day the change was announced.

While the February announcement does not mention the provision, it was discussed at the press conference announcing the change, according to the postal service spokesman.