Postal Service To Stop Saturday Mail

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WASHINGTON (CNNMoney) — The U.S. Postal Service plans to stop delivering and collecting letters and other first-class mail on Saturdays beginning Aug. 5, although packages will continue to be delivered.

It will mark the end of an era for the agency, which started Saturday delivery in 1863.

Tired of waiting for Congress to help, the Postal Service unveiled its cost-saving plan Wednesday, which is expected to save $2 billion a year. It’s a drop in the bucket compared to a loss of $16 billion the Postal Service reported for 2012.

“It’s a responsible decision. It makes common sense,” said Patrick Donahoe, postmaster general and CEO of the postal service.

The move will impact 22,500 jobs, Donahoe said, which he plans to achieve without resorting to layoffs. Rather, he would offer buy outs, eliminate overtime, and rely more on the part time workforce. There will be no changes to post offices that are currently open on Saturday and mail will continue to be delivered to PO boxes.

Technological advances have led to a decline in first-class mail, which most consumers use to stay in touch and pay bills. But the key culprit for the Postal Service’s woes has been a 2006 congressional mandate, under which it has to pre-fund healthcare benefits for future retirees. The USPS has been borrowing billions of dollars from taxpayers to make up for the shortfalls.

The situation turned particularly dire last year — the agency twice defaulted on payments totaling $11 billion, and it exhausted a $15 billion line of credit from the U.S. Treasury.

In the past year, the service has cut hours at thousands of post offices — some are open for only two hours a day. It has also merged some of its plants, which led to a 28,000 drop in its workforce through retirements and departures by employees who couldn’t relocate or take up other postal jobs.

Related: How to build a better post office

Postal officials have been calling on Congress to pass legislation to ease their fiscal pain.

The U.S. Postal Service is, by law, an “independent establishment” of the executive branch. The agency doesn’t normally use tax dollars for operations, except for its $15 billion loan from Treasury. In 2005, the Postal Service had no debt, officials said.

If Congress doesn’t act soon, the Postal Service could come dangerously close to running out of cash next month. A report last year projected that by mid-March, the agency would have about $1 billion in cash — barely enough to keep the agency running for four days.

That prompted U.S. Postmaster General Patrick Donahoe to announce he was going to his board to accelerate cost-cutting measures. In the meantime, Rep. Darrell Issa, a California Republican, and Sen. Tom Carper, a Delaware Democrat. have been assuring the agency that they are working together to come up with a resolution.

But Issa and Carper have not shared specific details of when, or how, they plan to achieve that goal. Congressional aides say they’re hopeful it’ll get passed soon.

The unions strongly oppose this move and have been fighting it for years. The American Postal Service Workers Union said the decision only deepens the financial crisis.

“USPS executives cannot save the Postal Service by tearing it apart,” the union said in a statement. “The USPS has already begun slashing mail service by closing 13,000 post offices or drastically reducing hours of operation, shutting hundreds of mail processing facilities, and downgrading standards for mail delivery to America’s homes and businesses. The effects are being felt in cities and towns across the country.”

— CNN’s Dana Bash contributed to this article.

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  • Sherry Whittington

    Isn't that just sweet. They up the postage stamp! They can't even deliver the mail to the correct address and now they'll just get rid of Saturday delivery. Well I guess that is one less day of worry of whose mailbox my mail will end up in.

    • Lynn

      Wow Sherry….you are bitching about one cent?!! Really?!!! Your mail is picked up at your home and delivered to any location in the country for 46 cents!! You can even send mail too Hawaii for 46 cents!! Try to find someone else to do that!!! I'm sure your just one of those miserable people who complains about everthing!! So sad.

  • mary

    Never got much mail on Saturdays anyways.Maybe one or two pieces of advertising or something.Nothing to go running out to the mailbox for.

  • Dan

    I look at it this way… I wouldnt go through snow, sleet or rain or travel hundreds of miles for 46 cents… Would you? LOL on the other hand I dont use the postal service at all. I went paperless years ago and I dont get junk mail….Its awesome

  • Tammy Head

    with them STOPPING SATURDAYS MAIL they need to STOP raising the Stamp Prices and NOT everyone goes PAPERLESS Dan. I would rather see my bill in person and NOT on the computer so I know for sure when it is due and know what they are running for sure

    • Lynn

      Are you saying that paying mere 46 cents for a letter to be picked up at your house ad delivered all the way across the country or wherever is a lot of money?!!! Perhaps you can find someone to do it cheaper? The price only goes up a penny at a time!!

  • 2013worldseries

    One less day of getting bills. In my world, that's a "good thing." Honestly, I don't know why this wasn't done years ago.

  • Sondra

    I hope this legislation can be changed to help them. I rely on USPS for my business, they are very efficient for the price and when there are problems, they offer fast resolutions. There is no other service I can have a Saturday package delivered overnight, pretty much anywhere in the US for only $18 – $35.00!! UPS and FedEx are between $35-$80!! Those who are complaining about the small increases, at least they are now selling the "forever stamps" so you no longer have to purchase the additional stamps when there is an increase. I think they have been very fair. You have no idea how much work these people do and how much you would miss it if it was gone. I support no Saturday deliveries.

  • Deb

    So the PO is going spend money training some new part time employee to eliminated overtime and to deliver packages on Saturday.Meanwhile putting out of work postal carriers that are already trained and know the routes. I see a high turn over and unhappy customers. They need to eliminate some of the high paying station mangers since they have morning and afternoon supervisors.