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Postmaster General says two changes would solve budget woes

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All the Postal Service needs to do to steady itself is reduce the prepayments it makes to a retiree healthcare fund and eliminate Saturday general mail deliveries, says Postmaster General Patrick Donahoe.

Speaking on "CBS This Morning" on Nov. 28, Donahoe said that despite "facing its own fiscal cliff" and posting a $15.9 billion loss in fiscal 2012--more than three times its $5.1 billion loss in fiscal 2011--the agency doesn't plan to ask Congress for money.The service has reduced its workforce by 280,000 over the past 10 years and plans to finish this year with 40,000 fewer employees than in January.

"I think most people don't realize we're 100 percent self-sufficient," said Donahoe. "We take no tax money." 

Donahoe says USPS must prepay its retirement health fund to the tune of $5.5 billion each year, and he wants Congress to reduce that to $1 billion per year. He also would like Congress to let the Post Office stop its general mail delivery on Saturdays, though it still would keep locations open and provide package delivery on Saturday.

If these two steps were taken, he says the agency would make roughly $8 billion each year.

The business of the Post Office is shifting, but Donahoe says the agency isn't sitting still. While overall mail volume has dropped by 25 percent over the last five years, which he attributes largely to people paying bills online, he notes that package volume is growing 10 percent year-over-year. USPS also plans to launch a same-day service for the San Francisco, Calif. area called Metro Post.

The Post Office mandate to "provide universal service to the American public at a universal price" prevents any private sector company for exactly duplicating the USPS model, Donahoe added.

In fact, private couriers use USPS to deliver packages and letters to kany suburbna and rural areas, he said. "Federal Express is our fourth largest customer, UPS is our sixth largest customer," said Donahoe.

For more:
- watch the "CBS This Morning" clip

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