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U.S. card industry, mail carriers flex muscle in Postal Service debate

WASHINGTON (Reuters) - The U.S. lobbying forces that defeated a Postal Service plan to end Saturday delivery to reduce its annual deficit are now using their Capitol Hill clout to pass a law to make six-day delivery mandatory.

The Postal Service, which is losing millions of dollars everyday as more Americans communicate by email and the Internet, has said it could require a $47 billion taxpayer bailout by 2017 if Congress doesn't permit cuts.

At a hearing on Wednesday before the House Committee on Oversight and Government Reform, the president of the National Association of Letter Carriers urged lawmakers to write six-day delivery into law.

"Members of the committee should not blindly follow uninformed public opinion when it comes to Saturday delivery," said Frederic Rolando.

A bill mandating six-day delivery begun in the Oversight Committee in January has gained momentum and now boasts 175 cosponsors. It is yet another sign of the growing influence of interest groups and postal employee unions who constitute a powerful lobbying force on Capitol Hill.

The group, which includes lobbyists for greeting card companies, the newspaper industry and letter carriers unions, spent more than $1 million last year to thwart the Postal Service's plan.

A legal opinion from the Government Accountability Office in March that said cutting Saturday service would be illegal further dent the plan.

Supporters on both sides of the issue realize the debate is far from over.

Tonya Rush, president and chief executive of the Newspaper Association, said some interest groups realize the Postal Service is trying to find solutions to financial losses that totaled $16 billion last year.

"Even though we're in agreement with the Postal Service in many of the things that they're trying to do. This is one in which we disagree," he said.

Backers of the Postal Service plan blamed lobbyists for defeating the five-day-a-week proposal.

SERIOUS POLITICAL PRESSURE

"Despite some assertions, it's quite clear that special interest lobbying and intense political pressure played a much greater role in the Postal Service's change of heart than any real or perceived barrier to implementing what had been announced," Republican Representative Darrell Issa of California said in a statement.

Rush said her association's fight kicked into higher gear last month when more than 100 members visited lawmakers to support six-day delivery. "This is how laws are made," said Rush.

Rafe Morrissey, the Greeting Card Association's vice president for postal affairs and a Hallmark lobbyist, said the coalition mobilized urgently after the Postal Service announced its plans.

Lobbyists emphasized that the Postal Service could not prove that it could achieve $2 billion in savings.

The mailing coalition's power in the fight underscores how difficult it will be for the Postal Service to win congressional approval for other cost-cutting moves, such as layoffs, rural post office closures or stepping up competition with private-sector companies.

A budget proposal from President Barack Obama offers significant concessions to the Postal Service, including a provision to eliminate Saturday delivery.

Lobbying records show that last year, the National Association of Letter Carriers, National Rural Letter Carriers' Association, Greeting Card Association and Envelope Manufacturers Association spent nearly $1 million combined pushing for six-day delivery.

The three major postal unions also poured a total of more than $7 million last year into the re-election campaigns of key congressional supporters, according to data on OpenSecrets.org.

(Reporting By Elvina Nawaguna; Editing by Marilyn W. Thompson and Philip Barbara)

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