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US Postal Service 'Unsustainable' Situation, Leader Says

U.S. Postal Service officials understand it needs major cutbacks to survive and are willing to work with Congress to do whatever's necessary, including ending Saturday service, Postmaster General Patrick Donahoe told CNBC Friday.

United States Post Office
Bloomberg | Getty Images
United States Post Office

“The situation we have is unsustainable,” Donahoe said in reaction to comments earlier this week from Rep. Darrell Issa, who said more than 200,000 postal jobsneed to go.

In fact, the USPS itself has put forward a broad plan that includes terminating Saturday mail delivery, closing more than 3,600 facilities across the country, and addressing the $5.5 billion hole in the service's pension plan and the $5.1 billion operating deficit from 2011.

Most recently, the service reached an impasse with two unions that have been working without a contract since November. The USPS has sought authority to lay off workers and reduce benefits.

The post office gets no taxpayer money, operating instead off the fees it charges for an operation that has come under intense pressure as email has removed the need for many standard mail services.

A one-cent stamp increase this week, along with Issa's comments on CNBC, reignited the contentious discussion of the postal service's future. A first-class stamp now costs 45 cents.

“It's not a game of chicken,” Donahoe said. “What we're proposing is a responsible plan to address an unsustainable business situation. People take the postal service very personally...The Postal Service is still a very important part of the American economy and society in general.”

The postal service had planned on putting its plan into effect, but stopped when Congress asked for time to work out an alternative.

“Congress has asked us to put the brakes on for a few weeks. We were going to start rolling with this in the beginning of April,” Donahoe said. “We're willing to work with everybody up there very closely over the next couple of weeks to see if we can push something through.”

He also defended the service's efforts to address the problems on its own without congressional mandates.

“The people have gotten a heck of a lot more production. Service levels continue to be at all-time highs,” Donahoe said. “We've done everything we can do to right this situation ourselves. We just need to address some big structural issues.”

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