Postal Service backs off plan to close rural post offices

The financially struggling U.S. Postal Service sought Wednesday to tamp down concern over wide-scale cuts, revealing it will seek to keep thousands of rural post offices open with shorter hours.

At a news briefing, Postmaster General Patrick Donahoe said the mail agency was backing off its plan to close up to 3,700 low-revenue post offices sometime after May 15. Citing strong community opposition, Donahoe said the agency will now whittle down full-time staff but maintain a part-time post office presence in rural areas, with access to retail lobbies and post office boxes.

Under the emerging strategy, no post office would be closed. But more than 13,000 rural mail facilities could see reduced operations of between two and six hours.

The Postal Service intends to seek regulatory approval and get community input, a process that could take several months. The new strategy would then be implemented over two years and completed in September 2014, saving an estimated half billion dollars annually.

"We've listened to our customers in rural America and we've heard them loud and clear — they want to keep their post office open," Donahoe said. "We believe today's announcement will serve our customers' needs and allow us to achieve real savings to help the Postal Service return to long-term financial stability."

Under the new plan, communities would be given the option of keeping their area post offices open but at reduced hours. Another option would be to close a postal office in one area while keeping a nearby one open full-time. Communities also could opt for alternatives including creating a Village Post Office in which postal services are offered in libraries, government offices or local stores such as a Wal-Mart, Walgreens or Office Depot.

"At the end of the day, we will not close rural post offices until we receive community input," said Megan Brennan, the Postal Service's chief operating officer. "We believe very few post offices will be closed over the next few years."

The latest move comes as the Postal Service is making a broad push for Congress to pass legislation this summer that would allow the agency to move forward on its multi-billion dollar cost-cutting plan, which includes an end to Saturday mail delivery. In Feburary, the agency said it would close eight mail-processing centers in Indiana unless Congress acts by May 15.

High concern in rural communities over proposed closures has been a principal barrier to the cost-cutting effort, with residents in the sprawling and remote areas expressing fears about their ability to get timely mail delivery of prescription drugs, newspapers and other services. That has raised the ire of rural-state lawmakers in particular in an election year.

Due to rural opposition, the Senate this month passed a bill that would in part impose a one-year moratorium on shuttering rural post offices and place additional restrictions afterward, a move that the Postal Service later denounced as "totally inappropriate" because it kept unneeded facilities open.

In the House, hesitancy among rural lawmakers is helping to stall a separate bill that would allow for far more aggressive postal cuts.

Most of the 3,700 post offices that had been under review for possible closing had been in rural areas with low volumes of business, with as many as 3,000 only having two hours of business a day even though they are open longer. Currently the post office operates more than 31,000 retail outlets around the country.

The mail agency said it expects to save more money off the new plan, mostly by weeding out full-time postmasters who don't have labor contract protections and replacing them with part-time workers. It plans to offer buyouts for the nation's more than 21,000 postmasters, noting that more than 80 percent of its postal costs in rural areas are labor-related.

The Postal Service has been grappling with losses as first-class mail volume declines and more people switch to the Internet to send messages and pay bills. The agency has forecast a record $14.1 billion loss by the end of this year; without changes, it said, annual losses will exceed $21 billion by 2016.

It also is pushing Congress to pass legislation by early summer. If the House fails to act soon, postal officials say, they will face a cash crunch in August and September, when the agency must pay more than $11 billion to the U.S. Treasury to prefund future retiree health benefits. Already $13 billion in debt, the health payment obligation will force the mail agency to run up against its $15 billion debt ceiling, causing it to default on the payments.