The US Postal Service is reportedly in debt, with a loss of $3.8 billion dollars in the fiscal year of 2009. Mail volume was down by 12.7% and the agency is not hopeful for a recovery, blaming online transactions for messages and bill payments.

So what does that mean for consumers?

As of today, the US Postal Service proposes a plan that will cut out mail deliveries on Saturdays. Mail would only be delivered during the Monday through Friday work week. The US Postal Service also proposed closing branches and making self-service counters more effective in common locations like grocery stores and other retail places. The Saturday cut and self-service kiosks would help the USPS get out from under the rising debts.

The agency as a whole has a debt limit cut off of $15 billion and it expects to hit that limit as of 2011. As society changes and consumers gravitate toward the speed and efficiency of the Internet and electronic transactions, the bottom line is being affected. Since the USPS is an independent government agency, it does not receive financial assistance from taxpayers or other resources. It relies totally on its own revenues. It is also restrained from making certain decisions because of the Postal Reorganization Act of 1970.

One such constraint is not being able to close the smaller Post Office branches that are failing economically. The agency is also not allowed to expand any of its services beyond standard mail delivery. This limits income potential from outside resources. In countries outside of the US, postal offices have been able to expand and capitalize on other services such as banking. It would literally take an act of Congress to allow USPS to move beyond mail.

The agency’s budget has been taking a hit with more than $6 billion in budget cuts in the last year alone. 40,000 employees were reduced and overtime hours where cut. Transportation budgets were even cut as were other regular expenses. Congress also allowed for retiree health benefits to be reduced in legislation they passed. But even with all of the cutbacks, there is still a loss coming into 2010.

The agency will announce proposed plans later today. Those plans will then go before Congress. Consumers should be aware that one consideration will be an increase in postal prices but can be assured that the first-class stamps are price-locked at 44 cents throughout 2010.