WASHINGTON — Warning of an imminent financial crisis, President Barack Obama on Monday proposed bailing out the United States Postal Service, urging that it be allowed to cut mail delivery to five days a week and raise the price of stamps.
He also proposed allowing the service to get a $6.9 billion refund from an overfunded pension fund.
"Bold action is needed," Obama said of the Postal Service. "The administration recognizes the enormous value of the U.S. Postal Service to the nation's commerce and communications, as well as the urgent need for reform to ensure its future viability."
Unless the government acts quickly, he warned, the service will be insolvent by the end of the month, when it will have used up its cash reserves, will have hit its government mandated borrowing limit of $15 billion, and will be unable to make a required $5.5 billion payment to its retiree health program.
Obama also proposed restructuring the Postal Service's pension plan and allowing it to sell non-postal goods to bring in more money.
Tucked into his broader proposal to cut federal budget deficits, Obama's plan said the Postal Service is beset by long-term problems brought on by the recession and the loss of mail services to email.
Mail delivery has plummeted, with 43 billion fewer pieces this year than just four years ago.
Postmaster General Patrick Donahoe has proposed closing hundreds of post offices and mail facilities and eliminating Saturday mail delivery to save costs.
But many members of Congress are fighting plans to close postal facilities in their districts. And at least one member of the House said Monday that he opposed Obama's plan.
"The president's proposal is not what taxpayers or the Postal Service needs," said Rep. Darrell Issa, R-Calif., chairman of the House Oversight and Government Reform Committee. MORE FROM MCCLATCHY Is the post office too big to fail? Maybe not Regulations, taxes aren't killing small businesses, owners say Obama's job creation proposals already drawing fire Romney lays out comprehensive jobs, economic program Fed's zero-interest-rate policy burns savers
For more McClatchy politics coverage visit Planet Washington