Last updated: October 19, 2011 - 8:33am
Plummeting demand for traditional mail delivery, which funds the postal service, has created a looming fiscal crisis that has Congress, postal employees and government officials weighing a venture into non-mail business as a way to stay afloat.
It's a divisive issue on Capitol Hill, where lawmakers are sparring over whether and how far the post office should be allowed to venture into the private sector. The Postal Service said it would increase the cost of mailing a letter by one cent to 45 cents staring in January. Earlier in the week, the 280,000-member National Letter Carriers Association hired advisors from Wall Street to help find ways to make it viable. For more than 200 years, the agency has been almost singularly focused on delivering mail to everyone, everywhere. No longer will that alone sustain the nation's mail delivery system, Postmaster General Patrick Donahoe recently told Congress. He said the postal service faces mounting annual losses which could reach $16 billion by 2016 unless Congress passes legislation allowing the agency to slash its network and work force, reduce the amount it is required to set aside for retiree health benefits, drop Saturday delivery and have more freedom to offer products and services beyond mailing letters and packages. Labor is the agency's biggest cost, so cuts there will provide the most immediate relief, says Donahoe. But with mail expected to continue to drop, the agency can't "focus on cost cutting alone" and must also raise revenues for its long-term survival, according to an Oct. 6 report by the U.S. Postal Service Office of Inspector General.
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