Obama Endorses the End of Saturday Mail Delivery

Bloomberg Businessweek

March 5, 2014

Devin Leonard

U.S. Postmaster General Patrick Donahoe won a key supporter in his campaign to end Saturday letter delivery after President Obama endorsed the idea in his 2015 budget. But did the president go a bit too far?

The White House budget would give the U.S. Postal Service authority to eliminate both Saturday letter and package delivery immediately. Donahue has called only to end the letter service. First-class mail may be dying, but the agency’s package revenue is growing, and the USPS is counting on this line of business to keep it afloat. Donahoe doesn’t just favor a six-day week of package delivery—he wants to the ship packages on all seven. In October he struck a deal with Amazon.com (AMZN) to began delivering its boxes on Sundays.

Either way, Obama’s fiscal blueprint is likely to shift the terms of the debate in Congress about postal reform. A Senate committee last month approved a bill that would prevent the end of Saturday delivery until late 2017. Darrell Issa, the California Republican who chairs the House Committee on Oversight and Government Reform, favors ending Saturday delivery but hasn’t been able to get many colleagues to support his efforts.Postal employee unions fiercely oppose the idea. “Members of Congress on both sides of the aisle have expressed support for the protection of six-day mail delivery,” said Jeanette Dwyer, president of the National Rural Letter Carriers’ Association, in a statement. Dwyer called on the Obama administration to “abandon its insistence on slashing and eliminating service.” So the president’s budget puts Obama at odds with unions that helped elect him and on the side of Issa, with whom he rarely agrees. Such are the politics of postal reform in the United States.

Then again, Obama and Issa are in harmony with such countries as Canada, where service is being trimmed amid dwindling mail volume. So is Donahoe, who believes that ending letter delivery would save $2 billion annually.

The USPS, which lost $5 billion last year, would presumably save more money by eliminating package delivery. But that may not be amendable to the postmaster general. He’s bullish on boxes.