GAO: Postal Service must cut even more

John Dimsdale Apr 12, 2010
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GAO: Postal Service must cut even more

John Dimsdale Apr 12, 2010
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Kai Ryssdal: The U.S. Postal Service. as you may have heard, is in a heap of trouble. It’s billions of dollars in the red. It’s been thinking about reducing mail delivery to five days a week and closing some rural post offices.

Today those plans got an important endorsement. The Government Accountability Office has been looking at the past three years worth of postal finances. And it says the USPS has to do a lot more than just cut deliveries.

Marketplace’s John Dimsdale reports.


JOHN DIMSDALE: Mail volume has dropped 17 percent since 2007, thanks to the Internet and recession. The result, says GAO, is excess capacity. The auditors recommend closing post offices, cutting deliveries, raising prices for bulk mail, and outsourcing operations.

But Democratic Congressman Jose Serrano, who helps oversee the post office budget, worries about the threat to the nearly 600,000 workers in the postal service.

JOSE SERRANO: It was seen as reliable, not only in work, but in service. You know, neither rain nor sleet or snow would keep them away. That’s been part of who we are as a country. The delivery of mail six days a week. In this tough economy we should not be doing anything that may create a situation where we lose more jobs.

As for the GAO’s recommendation for outsourcing work, William Burrus at the American Postal Workers Union says current employees are more efficient handlers of the mail than outsiders would be.

WILLIAM BURRUS: The evidence shows that outsourcing costs more money. So if they have identified financial problems with the postal service, outsourcing is not a way of driving those costs down.

Union contracts ban lay-offs. That leaves attrition. The GAO recommends higher pay-offs for employees willing to retire early. The postal service already offered that carrot last year. The result was 20,000 extra retirements but that’s nowhere near enough to avoid losses the post office estimates could top $200 billion over the next decade.

In Washington, I’m John Dimsdale for Marketplace.

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