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Tuesday, October 23, 2012

The U.S. Postal Service and Six-Day Delivery: History, Issues, and Current Legislation

Wendy Ginsberg
Analyst in American National Government

After running modest profits from FY2004 through FY2006, USPS lost $25.4 billion between FY2007 and FY2011. Were it not for congressional action, USPS would have lost an additional $9.5 billion. In the first three quarters of FY2012, USPS had an $11.5 billion operational loss. 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 from six to five.

Members of the 112th Congress have introduced nine bills (H.R. 2309; H.R. 2434; H.R. 3591; H.R. 3744; S. 1625; S. 1010; S. 1573; S. 1789; and S. 1853) and one resolution (H.Res. 137) regarding six-day mail delivery. Companion bills H.R. 2309 (introduced by Representative Darrell Issa) and S. 1625 (introduced by Senator John McCain) would grant USPS the 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. Companion bills H.R. 3591 and S. 1853 would prohibit a move to six-day delivery. H.R. 3744, the Rural Service Protection Act, would require USPS to maintain current levels of delivery in rural areas for five years following enactment of the bill. H.Res. 137 would express the sense of the House of Representatives that USPS should maintain six-day delivery. Both the House and Senate 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.

Some lawmakers say the elimination of a delivery day could prompt further reductions in mail volume and lead to an economic “death spiral” for USPS. Other lawmakers argue that USPS should have the flexibility to eliminate six-day delivery if necessary to make USPS economically viable. Congress may choose to legislate the number of USPS delivery days or authorize USPS to determine its delivery schedule. The six-day delivery requirement ensures the delivery of mail to most U.S. residents on every day except Sunday—including delivery of infant formula, prescriptions, and periodicals. 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.

Date of Report: October 17, 2012
Number of Pages: 28
Order Number: R40626
Price: $29.95

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