WASHINGTON – President Obama supports allowing the U.S. Postal Service to stop delivering mail on Saturdays and to start selling items other than stamps and shipping supplies at post offices nationwide, according to his deficit reduction proposals released Monday.

The White House is also calling on Congress to return $7 billion that USPS paid into a federal retirement fund to the delivery service to help pay for other retirement and health-care costs. Obama’s plans also would allow the Postal Service to raise stamp prices beyond the rate of inflation to better match the cost of delivery.

The White House said its proposals would provide USPS with more than $20 billion in savings in the next few years and cut the federal deficit by more than $18 billion over the next decade.

Though the Postal Service is a self-funding entity that doesn’t accept taxpayer dollars, it is a significant piece of the unified federal budget because its workers and retirees draw benefits from federal workers’ compensation, retirement and health-care accounts.

The plans to assist the Postal Service are expected to be considered by the congressional fiscal supercommittee charged with identifying at least $1.5 trillion in deficit reduction in the next decade. Similar debt-reduction meetings chaired by Vice President Joe Biden this summer included discussions — and general agreement — on how to resolve the Postal Service’s challenges, according to several congressional sources. Those agreements are expected to be picked up by the supercommittee, the sources said.

But Sen. Susan Collins, R-Maine, top Republican on the Senate Committee on Homeland Security and Governmental Relations, criticized the White House plans. Collins, who is working on Postal Service reform legislation, said: “The administration’s proposals will not prevent the Postal Service from becoming insolvent. There is no response to the Postmaster General’s proposal to restructure the Postal Service’s underlying health and pension costs. There is little attempt to address the work force issues that drive 80 percent of USPS’ expenses.”

USPS expects to lose up to $10 billion when its fiscal year ends Sept. 30. The White House and House Democrats are calling on Congress to give the Postal Service 90 extra days to make its year-end retirement and health-care payments.

 

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