What you need to know about postal service cuts

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by Chris Patterson

(CNN) -- The U.S. Postal Service plans to halt Saturday delivery of letters and other first-class mail by August in an effort to chip away at billions of dollars in losses.

Here are answers to some frequently asked questions about the new policy:

Q: What does first-class mean and what kinds of Saturday deliveries will continue?

First-class mail service includes items weighing up to 13 ounces that in most cases are delivered within three days, the Postal Service says. That includes post cards, envelopes, letters from grandma and some bills. And while that sort of loose mail is expected to stop on Saturday, packages will continue to be delivered. Mail will also continue to be delivered to post office boxes.

Q: Is the Postal Service allowed to do this?

The U.S. Postal Service is, by law, an "independent establishment" of the executive branch of the federal government, but the move has raised questions as to whether its decision must ultimately be approved by Congress. The Postal Service says it has the autonomy to make the change. But Congress, which oversees the unit, has traditionally expected Saturday delivery service.

Q: Why did the USPS decide to do this?

Money. Last year, the cash-strapped service reported a loss of nearly $16 billion. Its woes began in earnest after a 2006 congressional mandate, which required it to prefund health care benefits for future retirees. The USPS has been borrowing billions. And if Congress doesn't act soon, it could come close to running out of cash next month.

Q: Why doesn't the government just privatize the Postal Service?

The U.S. Postal Service does not tap into taxpayer dollars for its regular operations. While it already functions more like a private company than a government bureaucracy, it still works under tight restrictions from Congress. Those regulations govern everything from how much stamps cost to gift card sales.

Q: Will post offices be closed on Saturday?

Post offices that are normally open on Saturday will remain open, but those facilities will not be processing mail until the start of the work week.

Q: What impact will the move have?

It will affect some 22,500 jobs, according to Patrick Donahoe, postmaster general and CEO of the postal service. But instead of layoffs, he plans to offer buyouts, eliminate overtime, and rely more on the part-time workforce.

Q: Has this ever happened before?

In 1947 and 1957, Saturday deliveries were stopped in some cities because of budget constraints. The moves led to protests and an eventual resumption of service.

Q: When does the new policy kick in?

It starts August 5, marking the end of an era; Saturday deliveries were started in 1863.

Q: What other cuts has the USPS made?

The American Postal Workers Union says the Postal Service has already begun making cuts by closing 13,000 post offices, slashing work hours and shuttering hundreds of processing centers. This has come as technological advances have reduced consumer use of traditional mail services.

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