America's new postmaster general will face the same daunting problems as the man she will succeed: budget losses in the billions and battles with Congress over cost-cutting.
The U.S. Postal Service's Board of Governors on Friday named Megan Brennan, now the agency's chief operating officer, to the top post in early 2015 when Postmaster General Patrick Donahoe retires.
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She will become the first woman to head the agency.
Brennan called the promotion "the honor of a lifetime, especially for one who comes from a postal family."
The announcement follows Donahoe's own disclosure he will retire Feb 1.
Donahoe, frequently at odds with Congress and the nation's postal unions, told reporters, "We are much leaner, much more technologically-centric than we were a few short years ago. We still have a long way to go."
He announced his retirement "39 years ago to the day" after he started his career as a 20-year-old postal clerk in Pittsburgh. "So it's probably time to step aside."
The agency reported a $569 million revenue increase in the fiscal year that ended Sept. 30, but an overall loss for the year of $5.5 billion. The heavy losses are a result of a congressionally mandated $5.6 billion annual payment for future retiree health benefits.
The shortfall "underscores the need for comprehensive legislation to repair the Postal Service's broken business model," the agency said in a statement. Legislation to put the Postal Service on firmer financial footing is bogged down in Congress.
The Postal Service's deteriorating financial state comes as fewer and fewer people use its biggest money-maker — first class mail — as the Internet continues to gain popularity.
Some losses are offset by an increase in package deliveries — largely from online purchases — but not by enough to put the service into the black.
The board met as hundreds of disgruntled Postal Service workers and their allies demonstrated outside the agency's headquarters over recent post office closures around the nation. Several dozen of them attended the public meeting inside but did not disrupt the session.
Postal-worker unions welcomed the change of command.
"We hope that the next postmaster general will reverse Donahoe's policies of lowering standards, reducing hours, outsourcing work and diminishing a great American institution," said Mark Dimondstein, president of the American Postal Workers Union.
Said Fredric Rolando, president of the National Association of Letter Carriers: "We hope that in addition to a new name, this change also involves a vision for the future that will enable the Postal Service to continue to adapt and to serve Americans and their businesses."
Donahoe oversaw a restructuring of the agency as it sought to deal with falling first-class-mail volume.
"Pat was the calm in the financial storm," said Mickey D. Barnett, chairman of the Board of Postal Governors.
In an interview, Donahoe said he decided to retire "about a month and a half ago." He said the recent controversy over the mid-September security breach involving the hacking of personal employee data was not a factor.
The agency has about 491,000 employees.
Postal Service officials have pushed Congress to pass comprehensive legislation that would allow it to end most Saturday mail deliveries and reduce the payment for future retiree health benefits.
The Postal Service is an independent agency that receives no tax dollars, but it still is subject to congressional control.
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