ROBERT SIEGEL, HOST:
From NPR News, this is ALL THINGS CONSIDERED. I'm Robert Siegel.
AUDIE CORNISH, HOST:
And I'm Audie Cornish.
The Postal Service says it can no longer afford to deliver the mail on Saturdays, so it won't. The announcement in Washington this morning came without approval from Congress, and some in Congress say the Postal Service has exceeded its authority - among them, Senate Republican Susan Collins. We'll hear from her in just a moment. But first, NPR's Yuki Noguchi reports the Postal Service is in big financial trouble, and ending Saturday delivery won't begin to wash away the red ink.
YUKI NOGUCHI, BYLINE: The underlying issue is that email and online bill paying is killing the Postal Service's business. Overall volume is down by billions of pieces of mail.
PATRICK DONAHOE: It's simple, it's easy, it's free. You cannot beat free.
NOGUCHI: You cannot beat free, but Postmaster General Patrick Donahoe is trying to stay afloat in the face of it. The Postal Service lost $16 billion last year, and every day, its hole gets $25 million deeper. Meanwhile, FedEx and UPS are taking market share in package delivery, which is where the money is. USPS will continue to deliver packages on Saturdays, just not letters, catalogs and the like.
DONAHOE: The biggest issue we face is whether we can adapt to these changes in the marketplace, and unfortunately our business model and the laws that govern us do not provide a lot of flexibility to adapt.
NOGUCHI: The problem is the Postal Service's murky, quasi-governmental status. It has a government mandate to provide universal delivery of mail at rates set by a commission. It must receive congressional approval to make big changes to its business, but it is also expected to operate financially independently.
Since it started losing money, it has had to borrow money from Treasury in order to fund its operations. Congress toyed with the idea of eliminating Saturday delivery, but hasn't passed it into law. And that raised a question today that Donahoe himself raised at his own press conference.
DONAHOE: I am going to ask myself the first question: Is this legal? Yes, it is. It is our opinion that the way that the laws is set right now with the continuing resolution that we can make this change.
NOGUCHI: The continuing resolution refers to the funding that is allowing the federal government to operate now as Congress debates the budget, and Donahoe argues that resolution doesn't prohibit his taking this step. He denied he was taking advantage of a legal loophole, though his critics were quick to dispute that.
The National Association of Letter Carriers pilloried Donahoe in its statement, saying he's flouting the law and should step down rather than forge ahead. Businesses who've lobbied to keep Saturday delivery said they were rounding up their troops to see whether Congress might intervene.
George White is president of Up With Paper and chair of the Greeting Card Association's Postal Affairs Committee. He says curtailing deliveries will only accelerate the Postal Service's demise.
GEORGE WHITE: Greeting cards are really the reason that people go to their mailbox every day because what they're hoping to get in all their mail is to get some level of personal correspondence.
NOGUCHI: White agrees Donahoe has his back against the wall financially, but thinks there are other areas where cuts should come first.
WHITE: We disagree with some of his recipes, and we hope that Congress will end up agreeing with us in terms of what is the best way to restructure the Postal Service to keep it healthy going forward.
NOGUCHI: The Postal Service says it plans to begin its new curtailed delivery schedule the week of August 5. Yuki Noguchi, NPR News, Washington. Transcript provided by NPR, Copyright NPR.
