May 2 (Bloomberg) -- The U.S. Postal Service is projecting a loss of as much as a $6 billion for the year as it keeps pressure on Congress for help, Postmaster General Patrick Donahoe said.
The government agency that’s supposed to support itself through postage sales lost about $3 billion in the first half of its fiscal year, from Oct. 1 through March 31, Donahoe said in an interview airing this weekend on Bloomberg Television’s “Conversations With Judy Woodruff.” That decline is projected to double by the year’s end, which is Sept. 30, he said.
The Postal Service continued its money-losing streak by reporting a first-quarter loss of $1.3 billion. The service is scheduled to release second-quarter results May 10, when its board meets in Washington.
Donahoe said the agency has cut costs by $15 billion since 2006, and now it’s up to Congress to take the next step. If Congress doesn’t allow the service to alter its business model and reduce its benefits costs, a taxpayer bailout through 2017 would cost $58 billion, he said last month.
“Congress needs to move now on postal legislation,” Donahoe said in the interview.
“When they required us to continue to deliver six days a week with the volume loss we’ve experienced, you have to make some changes,” he said. “And Congress needs to pass legislation now to resolve the six- to five-day, to resolve the pre-funding of health care and a number of other issues --things that are beyond our control. We’ve done everything in our control to move what we can move.”
A $6 billion annual loss this year would be an improvement over last year’s $15.9 billion drop, which included the cost of payments to the U.S. Treasury for future retiree health benefits that it didn’t make. The service has asked Congress for a longer payment schedule for those costs and labor unions representing postal workers have criticized the requirement, saying it’s an obligation private-sector businesses don’t have.
The congressional committees with postal oversight have each held a hearing this year on the Postal Service’s financial woes. No legislation has been introduced.
Some lawmakers who lament mounting postal losses criticized a now-scuttled plan the service announced in February to end Saturday letter delivery. The plan also called for cutting costs by closing post offices and mail-processing plants.
Senator Ben Cardin, a Maryland Democrat on the Senate Finance Committee, on April 30 said Congress will oppose the Postal Service’s plans to close about half of its mail-processing plants.
“We want to see the Postal Service viable,” he said at a conference in Washington sponsored by Bloomberg. “We want to make sure they have a model that works. We’d look for ways that they can get additional revenues. The tradeoff is that we want to see overnight delivery as the standard. We don’t want to see closings of these processing centers.”
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