Delivering mail

As the nation's reliance on electronic communications expands, the U.S. Postal Service's revenue is plummeting. One result: a proposal to drop Saturday mail deliveries to offset a projected deficit this year of $7 billion and the potential for losses of $238 billion over the next decade.

But dropping a day of mail deliveries is fraught with political ramifications. The chairman of a Senate oversight subcommittee is urging Congress to give the postal service the flexibility to make its own business decisions. Others suggest that privatization is the answer.

As the population grows, the postal service must continue to expand its destinations while experiencing a sharp drop-off in first-class mail, leaving it with lower-revenue deliveries.

The postal service, which has operated without tax revenue since 1971, faces some tough choices, including more rate increases. A first-class letter in the U.S. costs 21 percent less than in Canada and 44 percent less than the international average.

Last year, the postal service cut 60,000 jobs, reducing its work force to 595,000. It still faces expensive funding of pensions at a time when revenue is declining.

How the postal service manages to survive will be of particular interest to taxpayers, who once again may be asked to foot the bill.