The Postal Service is reeling from the decision by the Postal Rate Commission not to increase the price to mail a letter. USPS was hoping to use the rate hike to help close the $7 billion deficit it faces this year. The service continues to face reduced volume, more people using the Internet and legal barriers to changing key parts of its business mode.
Rep. Darrell Issa (R-Calif.) said he wants to give the struggling Postal Service more flexibility to act like a private business, including the ability to force retirement-eligible employees to step down. Meanwhile, the Postal Regulatory Commission worries the Postal Service is losing sight of its public mission.
Postmaster General Patrick Donahoe says a Senate bill aiming to overhaul the Postal Service’s financial structure by providing the agency more flexibility to price its products is a good first step. Donahoe has been calling on Congress to approve comprehensive postal reform for much of the last two years. In that time, the cash-strapped agency has posted losses of $20 billion and defaulted on more than $11 billion in payments to prefund retiree health care costs. USPS is set to default on a $5.6 billion payment due Sept. 30 payment, Donahoe said.