Postal Service seeks path to survival

WASHINGTON -- Imagine a nation without the Postal Service.

No more birthday cards, bills, magazines and catalogs filling the mailbox. It's a worst-case scenario being painted for an organization that lost $8.5 billion in 2010 and seems headed deeper into the red this year.

"A lot of people would miss it," says Tony Conway, a 34-year post office veteran who now heads the Alliance of Nonprofit Mailers.

Businesses, too.

The letter carrier or clerk is the face of the mail. But hanging in the balance is a $1.1 trillion mailing industry that employs more than 8 million people in direct mail, periodicals, catalogs, financial services, charities and other businesses that depend on the post office.

Who would carry mail to the Hualapai Indian Reservation in the Grand Canyon? To islands off the coast of Maine? To rural villages in Alaska? Only the post office goes to those places and thousands of others in the United States, and all for 44 cents.

Postmaster General Patrick Donahoe is struggling to keep his money-losing organization afloat as more and more people are ditching mail in favor of the Internet, causing the lucrative first-class-mail flow to plummet.

Donahoe has a plan to turn things around, if he can get the attention of Congress and overcome a series of hurdles, including union concerns.

"The Postal Service is not going out of business," postal spokesman David Partenheimer said. He acknowledged that if Congress doesn't act, the post office could reach a point next summer where it doesn't have the money to keep operating.

Donahoe and his predecessor, John Potter, have warned for years of the problems and stressed that the post office will be unable to make a mandated $5.5 billion payment due Sept. 30 to a fund for future medical benefits for retirees.

A 90-day delay on the payment has been suggested, but a long-term solution is needed.

Donahoe has one. It includes laying off staff beyond the 110,000 cut in the past four years, closing up to 3,700 offices, eliminating Saturday delivery and switching from the federal retirement plan to its own.

Cliff Guffey, president of the American Postal Workers Union, called the proposal "outrageous, illegal and despicable." A contract signed in March protects many workers from layoffs. The attempt to change that now, Guffey said, "is in utter disregard for the legal requirement to bargain with the APWU in good faith." Other unions, including the National Association of Letter Carriers, are negotiating their contracts with the post office.

Closing offices seems an easy way to save, but members of Congress never want cuts in their districts, and people want their local office to stay open.