Postal Service backs off plan to stop Saturday delivery

Posted at 10:13 AM, Apr 10, 2013
and last updated 2013-04-10 12:13:55-04

WASHINGTON (CNNMoney) — The U.S. Postal Service has backed down from its plan to stop Saturday mail delivery.

The postal service’s board said Wednesday that it will continue to deliver mail six days a week. In February, the agency announced a plan to stop delivering mail on Saturdays, except for packages and express mail.

The board said Wednesday it decided to stay the course because of a Congressional mandate for Saturday delivery that had been on the books since the 1980s. Congress decided to keep that mandate last month when it passed a funding measure to keep the government running.

The Postal Service had been hoping Congress would strip that mandate out.

“Although disappointed with this Congressional action, the Board will follow the law and has directed the Postal Service to delay implementation of its new delivery schedule until legislation is passed that provides the Postal Service with the authority to implement a financially appropriate and responsible delivery schedule,” the board said in a statement.

Several lawmakers accused the agency of overstepping its legal authority when the postal service first announced its plan.

Last month, the U.S. Government Accountability Office sided with critics saying current law requires the agency to continue six-day delivery.

The U.S. Postal Service had said its plan would not violate the law, because it’s only changing six-day delivery — not ending it — since packages would continue to be delivered on Saturdays.

Ending Saturday delivery would have saved the cash-starved postal service $2 billion a year.

A key culprit for the Postal Service’s cash problems 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.

At the same time, technological advances have led to a decline in first-class mail, which many consumers use to pay bills and stay in touch.

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. The agency reported a $16 billion loss in 2012.

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