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Postal Service bid to end Saturday mail fails

WASHINGTON -- The Postal Service backpedaled on its plan to save billions of dollars by ending Saturday mail delivery, conceding Wednesday that its gamble to compel congressional approval had failed.

With limited options for saving money, the governing board said the agency should reopen negotiations with unions to lower labor costs and consider raising mail prices.

Yet the board also said it's not possible for the Postal Service to meet its goals for reduced spending without altering the delivery schedule. Delaying "responsible changes," the board said, only makes it more likely that the Postal Service "may become a burden" to taxpayers.

The Postal Service said in February that it planned to switch to five-day-a-week deliveries beginning in August for everything except packages to save $2 billion.

That announcement was risky. The agency was asking Congress to drop from spending legislation the longtime ban on five-day-only delivery.

Congress kept the restriction when it passed a spending measure last month.

Postal officials said that to restore the service to long-term financial stability, the agency must have the flexibility to reduce costs and come up with new revenues.

An independent agency, the service gets no tax dollars for its day-to-day operations but is subject to congressional control. It lost nearly $16 billion last year -- $11.1 billion of that due to a 2006 law Congress passed forcing it to pay into future retiree health benefits, something no other agency does.

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