By Emily Stephenson
WASHINGTON (Reuters) - The U.S. Postal Service has agreed to a five-month moratorium on closures of post offices and processing facilities while lawmakers hammer out legislation to overhaul the cash-strapped mail carrier, a group of U.S. senators said on Tuesday.
The Postal Service was studying about 3,700 money-losing post offices for possible closure starting in February 2012, and considering closing hundreds of processing centers in April.
The senators said USPS officials agreed to push back the closures to give lawmakers time to pass legislation that would help get the Postal Service back on track before the end of fiscal year 2012, when the mail carrier has said it could shut down.
The Postal Service, which does not receive taxpayer money to fund its services, lost more than $5 billion in fiscal year 2011 and says it needs to shed about $20 billion in annual costs by 2015. The Postal Service has argued that facility closures will help it adjust to falling mail volumes as consumers turn to the Internet to communicate and pay bills.
"The House and the Senate have until May 15 to reach an agreement for postal reform which will bring the Postal Service to a financial status where they can continue and expand operations," said Senator Dick Durbin of Illinois.
Several members of the group had been critical of Postal Service plans to close facilities, particularly in rural areas.
A House of Representatives committee and a Senate committee each have passed postal overhaul bills, but neither is expected to be voted on by either the full House or the Senate this year.
The two proposals differ on key issues such as when the agency should be allowed to end Saturday mail delivery and how to offer relief from a multibillion-dollar annual payment to prefund retiree health benefits, which the agency says it cannot afford.
Senator Bernie Sanders said the Postal Service needs more flexibility to offer new services, such as issuing hunting and fishing licenses at rural post offices and delivering wine and beer.
"The Postal Service by law has been restricted in the ways that they can raise revenue," Sanders said. "One of the areas that we are looking at is to give the Postal Service more flexibility for entrepreneurial capabilities in order to raise revenue and serve the needs of their constituents."
The Postal Service said in a statement that it will continue analyzing post offices and processing facilities for possible closure while it waits for Congress to act.
In separate letter to its watchdog, agency officials agreed to conduct economic analyses of planned post office closures in response to criticism that post offices were selected without sufficient assessments of the financial impact of closure.
The Postal Service will produce an economic model for evaluating post office closures by February 2012, postal management said in a letter to the agency's inspector general.
The model will consider geographic and demographic breakdowns of sales, among other factors previously not analyzed by the Postal Service in pulling together its list of 3,600 post office closures, the letter said.
(Additional reporting by Cezary Podkul in New York)