What will deliver USPS from debt?
A man drops letters into a mailbox in San Francisco
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Steve Chiotakis: Recession? Check. The Internet making snail mail less and less needed? Oh yeah. Private delivery competition? You bet. The Post Office has seen a 20 percent drop in mail volume and now is in a heap of debt. Today, a congressional committee wants to look at what the U.S. Postal Service is proposing to bring costs down. Here's Marketplace's John Dimsdale.
John Dimsdale: The Government Accountability Office will testify today that the postal service has been added to the list of government agencies at high risk for financial failure. The GAO's Phillip Herr doesn't expect the volume of mail to return anytime soon.
Phillip Herr: Their financial situation is deteriorating. At this point, they don't expect to cover their expenses and obligations in fiscal years 2009 and 2010.
That's despite a two-cent increase in stamp prices in May and lots of cost cutting. Fewer employees, fewer streetcorner mailboxes. Deputy postmaster general Patrick Donahoe says more than 90 percent of today's delivery service is automated.
Patrick Donahoe: When the letter carrier who comes around to your neighborhood delivers the mail, he or she never touches it until they take it out of the tray and put it into your mailbox. It's already sorted for them the whole way through the system.
Donahoe says USPS is trying to minimize cutbacks in customer service, but 3,200 post office branches nationwide are slated to be closed. And if Congress gives the OK, home mail delivery on Saturdays will be dropped, saving $3.5 billion a year.
In Washington, I'm John Dimsdale for Marketplace.