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Obama recommends bailing out post office

President Obama on Monday proposed bailing out the U.S. Postal Service, urging that it be allowed to cut mail delivery to five days a week and raise the price of postage.

He also proposed allowing the service to get a $6.9 billion refund from an overfunded pension fund.

"Bold action is needed," Obama said. "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 said, the service will be insolvent by the end of the month, when it will have used up its cash reserves, will have reached its government-mandated borrowing limit of $15 billion and will be unable to make a $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 sent 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.

Sen. Tom Carper, D-Del., who has proposed a bill including many of the same suggestions, welcomed the president's statement.

"I have been saying for some time now that Congress and the administration need to come together on a plan that can save the Postal Service and protect the more than seven million jobs that rely on it," he said in a statement.

Rep. Darrell Issa, R-Calif., who has his own postal reform bill in the House, responded that "the president's proposal is not what taxpayers or the Postal Service needs."

He asserted that Obama's plan "will certainly cost taxpayers money." Currently, the post office does not receive tax funds for its operations.

Meanwhile, 75 members of Congress called on the independent Postal Regulatory Commission to block the post office's plans to close as many as 3,700 local offices across the country.