US Postal Service freezes planned closings for five months: senators

The USPS, which is government-owned but expected to stand on its own financial legs, said in September it would review operations to find savings and has been weighing shuttering 3,700 post offices — most in rural areas.

The Postal Service, which has also mulled ending overnight delivery, has been piling up losses since early 2008 due to rising costs and a decline in volumes caused by rising Internet use and e-commerce.

The news came a day after senators took their worries about reduced service and the loss of thousands of jobs to U.S. Postmaster General Patrick Donahoe and the U.S. Postal Service Board of Governors Chairman Thurgood Marshall, Jr.

“There is no doubt that the Postal Service as we know it today has to adapt, but I think a better solution exists,” said number-two Democratic Senator Dick Durbin.

“The Postal Service has given Congress five months to act. It's now up to us to move forward with comprehensive legislation that does not jeopardize the best postal service in the world,” said Durbin.

The USPS in mid-November reported a US$5.1 billion loss for fiscal year 2011 and warned of more trouble if it has to meet obligations to pay into a retiree health benefits program.

The USPS said the year-end loss would have been US$10.6 billion had it not been for legislation that postponed a congressionally mandated payment of US$5.5 billion to pre-fund retiree health benefits.

Hit by falling revenues from lower mail volumes and a sizable historical debt burden, the USPS said it remains weak and unable to honor huge commitments to fund its retirement programs.

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