Postal Service 'facing losses of historic proportion'

WASHINGTON -- Postmaster General John Potter said Wednesday the financially strapped U.S. Postal Service will run out of money this year without help from Congress.

The only lingering question, Potter told a House subcommittee, is which bills will get paid and which will not. He did say ensuring the payment of workers' salaries comes first. But Potter also said other bills may have to wait.

Potter's appearance came as the agency, which has lived on a reputation of serving through wind, rain and all sorts of obstacles, seeks permission to reduce mail delivery to five days a week. It also wants to change the way retiree health benefits are amassed to save money.

"We are facing losses of historic proportion," he said. "Our situation is critical."

The Postal Service was $2.8 billion in the red last year and is facing even larger losses this year due to a sharp decline in mail volume in the weak economy. Potter broached the possibility of cutting mail delivery from six days to five in January, but the idea has not been warmly received in Congress.

"With the Postal Service facing budget shortfalls the subcommittee will consider a number of options to restore financial stability and examine ways for the Postal Service to continue to operate without cutting services," subcommittee chairman Stephen F. Lynch, D-Mass., said.

Lynch said the financial stability of the Postal Service is "critical to the American expectation of affordable six-day mail delivery."

The post office is also seeking changes in its required pre-funding of medical costs for retirees that could cut its annual costs by $2 billion, a move endorsed by several subcommittee members.

"We are not here today to ask for a taxpayer bailout, but we are here to ask the Congress for help," William Young, president of the National Association of Letter Carriers, said in his prepared testimony.

"At this moment, the survival of the Postal Service — a venerable institution that is literally older than our country — hangs in the balance," he added.