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Wednesday, November 9, 2011

The U.S. Postal Service and Six-Day Delivery: Issues for Congress


Wendy R. Ginsberg
Analyst in Government Organization and Management

After running profits from FY2004 through FY2006, the U.S. Postal Service (USPS) lost $20.4 billion from FY2007 through FY2010. At the conclusion of the third quarter of FY2011, USPS had $901 million in cash—a low level for an agency with an average weekly operating expense of more than $1.4 billion. USPS leaders, Congress, and the public have suggested methods that may increase revenue or reduce expenses. Among these suggestions is reducing the number of days per week that USPS delivers mail.

On March 30, 2010, USPS made its first formal step toward a move to five-day delivery when it asked the Postal Regulatory Commission (PRC), an oversight body, for an advisory opinion on the elimination of Saturday delivery. Some lawmakers have criticized the elimination of a delivery day, stating that reducing service days could cause even greater reductions in mail volume and lead to a “death spiral” for USPS. Other lawmakers argued that USPS should have the flexibility to eliminate six-day delivery if they decide it is necessary.

Congress may choose to legislate the number of USPS delivery days or authorize USPS to determine its delivery schedule. The six-day requirement ensures the delivery of mail to most U.S. residents on every day except Sunday—including delivery of infant formula, prescriptions, and periodicals to rural and sometimes underserved areas of the country. Authorizing USPS to eliminate a delivery day could reduce delivery costs and improve USPS’s challenging economic condition. Studies that examined the elimination of a delivery day estimated that USPS could save between $3.5 billion (USPS study) and $1.7 billion (Postal Regulatory Commission (PRC) study) annually. Such action, however, may reduce patronage, lead to job losses at USPS, or harm underserved communities that rely on mail delivery for certain necessities. Moreover, elimination of a delivery day alone will not solve USPS’s budget troubles.

Members of the 112th Congress have introduced three bills (H.R. 2309; S. 1265; S. 1010) and one resolution (H.Res. 137) that could affect six-day mail delivery. On June 23, 2011, Representative Darrell Issa, chairman of the Committee on House Oversight and Government Reform, which has jurisdiction over USPS, introduced H.R. 2309, The Postal Reform Act of 2011. Senator John McCain introduced companion bill in the Senate (S. 1265). On October 13, 2011, the House Committee on Oversight and Government Reform ordered H.R. 2309 to be reported in the nature of a substitute, which included the authority for USPS to move to five-day delivery—but only after the PRC released an advisory opinion on the elimination of Saturday delivery. However, upon enactment of H.R. 2309, as ordered to be reported by the committee, the Postmaster General would be given the authority to cut up to 12 delivery days per year. S. 1010, introduced by Senator Thomas R. Carper, would give USPS the authority to determine the number of days it delivered mail. H.Res. 137, on the other hand, would express the sense of the House of Representatives that USPS should maintain six-day delivery.

In The President’s Plan for Economic Growth and Deficit Reduction, released in September 2011, the Office of Management and Budget supported authorizing USPS to eliminate a delivery day.

The 112th Congress may consider the elimination of a mail delivery day as part of a larger debate over the future of USPS. This report will examine the history of six-day mail delivery, compare delivery options in other countries, and analyze potential effects of reducing USPS delivery from six to five days. It will then examine some potential policy options for Congress.



Date of Report: November 1, 2011
Number of Pages: 37
Order Number: R40626
Price: $29.95

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