The U.S. Postal Service doesn't have legal authority to end Saturday mail delivery without authorization from Congress and must halt plans to take that step in August, its board said.
The board's action follows a Government Accountability Office opinion last month saying the service didn't have the authority to stop Saturday deliveries, a move officials said would save about $2 billion annually.
The service, which lost $15.9 billion last year, may be left with few options to quickly cut costs. Congress hasn't passed legislation to relax a requirement that the service pay now for future retirees' health-care costs, which the service says it can't afford. It also hasn't allowed the service to accelerate closings of rural post offices.
"The board believes that Congress has left it with no choice but to delay this implementation at this time," the board, which said it supports cutting Saturday delivery when allowed to do so, said in an e-mailed statement.
"The board also wants to ensure that customers of the Postal Service are not unduly burdened by ongoing uncertainties and are able to adjust their business plans accordingly."
The panel directed service management to find other ways to lower labor costs, including by seeking to reopen contract negotiations with its unions.
Postmaster General Patrick Donahoe has said he relied on a new interpretation of a law governing the service, based on the fact the government is operating with temporary funding, to declare he didn't need Congress's permission to reduce letter delivery to five days a week.
He will obey the board's decision and try to cut costs in other ways and raise revenue, David Partenheimer, a service spokesman, said.
"Both the board and the postmaster general have made it very clear that the status quo is not an option," he said. "It's critical that Congress introduce and pass comprehensive postal legislation to enable the Postal Service to return to long-term financial stability.
Commercial customers are happy to have some certainty to be able to plan mailings for later this year, said Jerry Cerasale, senior VP-government affairs for the Direct Marketing Association, based in New York.
The association doesn't have an opinion on cutting Saturday delivery because its members don't agree, he said, suggesting closing facilities as a way to cut costs.
''The Postal Service still has excess capacity, a lot of processing plants that are going to be scheduled to close," Mr. Cerasale said. "They can speed that up and get a lot of capacity out of the system."
Representative Darrell Issa, a California Republican who backed the service on its interpretation, said he's "disappointed" the service is backing away from its plans.
Mr. Issa, on the day of the February announcement to end Saturday delivery, put out a statement asking Congress to support the cut. Today, he issued a statement criticizing the Postal Service for standing down.
"This reversal significantly undercuts the credibility of postal officials who have told Congress that they were prepared to defy political pressure and make difficult but necessary cuts," said Mr. Issa, chairman of the House Oversight and Government Reform Committee, which oversees the Postal Service.
Members of the American Postal Workers Union have already compromised, Sally Davidow, a spokeswoman for the union, said in an interview. They believe cuts should some from other places rather than renegotiating union contracts.
"The Postal Service saved $3.8 billion on account of compromises that the APWU made during negotiations," she said. "APWU members have done their part."
--Bloomberg News
