The US Postmaster General John Potter told Congress on Wednesday that the Postal Service is in acute financial crisis. " We expect that 2009 will be the first time that we have recorded a year-to-year revenue decline since 1946."

After spelling out the reasons along with actions taken to reduce operating costs and increase efficiencies, he asked for flexibility in the number of days the postal service delivers mail. He also asked for an eight-year adjustment to the USPS funding schedule for retiree health benefits. "Throughout the entire Postal Service, we remain focused on a systematic, data-driven approach to cost-cutting. We have targeted $5.9 billion in potential cost reductions in 2009 and 2010."

Potter said increasing rates beyond the statutorily-imposed price cap would be counterproductive, particularly in an environment where mailing activity has already severely contracted.

"Our interest is not in pursuing an exigent price increase to find new revenue, because we believe that driving up prices will only drive customers away. Our approach in shoring up the foundations of our business - to ensure that the Postal Service is able to serve America in the future - cannot be singularly focused on cost-cutting measures. Revenue growth that is based on business growth - not simply price increases - is also a key element that is necessary for our long-term viability. This is an important consideration as we begin to implement the new pricing tools made possible by the Postal Accountability and Enhancement Act."

Potter said the USPS expects volume to plunge by some 12 billion to 15 billion pieces. Preliminary quarter-one financial results show that revenue is down approximately $1.3 billion - 6.5 percent - from the same period last year.

The Postmaster General's full statement to the US Senate's Subcommittee on Federal Financial Management, Government Information, Federal Services and International Security of the Committee on Homeland Security and Government Affairs may be found on the USPS website