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Friday, December 2, 2011

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


Wendy Ginsberg
Analyst in American National Government

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.

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 USPS decides 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. Elimination of a delivery day alone will not solve USPS’s budget troubles.

Members of the 112th Congress have introduced four bills (H.R. 2309, S. 1265, S. 1010, and S. 1789) and one resolution (H.Res. 137) that could affect six-day mail delivery. Companion bills H.R. 2309 (introduced by Representative Darrell Issa) and S. 1265 (introduced by Senator John McCain), the Postal Reform Act of 2011, would grant USPS authority to move to five-day delivery. H.R. 2309, as ordered to be reported from the House Committee on Oversight and Government Reform, would require USPS to wait six months after enactment to begin the process of eliminating a delivery day. S. 1010, introduced by Senator Thomas R. Carper, would also give USPS authority to move to five-day delivery. S. 1789, introduced by Senators Susan Collins and Joseph Lieberman, would allow USPS to eliminate a delivery day only after two years and the completion of a USPS study that identified customers “for whom the change may have a disproportionate, negative impact,” among other conditions. H.Res. 137 would express the sense of the House of Representatives that USPS should maintain six-day delivery.

Both the House and Senate committee versions of the Financial Services and General Government Appropriations Act, 2012 (H.R. 2434, S. 1573), include language that would require USPS to continue delivering mail six days per week. 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 10, 2011
Number of Pages: 38
Order Number: R40626
Price: $29.95

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