US Postmaster General: Postal service needs 'radical change'

The U.S. Postmaster General Patrick Donahoe testified at a Senate hearing yesterday, telling Congress that the Postal Service is likely to default on its financial obligations and could face insolvency by this time next year unless lawmakers grant dramatic financial reforms.

Donahoe asked lawmakers to allow him to make "radical" changes to the Post Office operations in an attempt to balance its books, floating ideas such as eliminating Saturday delivery, closing 3,700 Post office locations, and laying off 120,000 workers.

The Obama administration responded to Donahoe's testimony by saying that it will try to prevent the Postal Service from defaulting by proposing to give it an extra three months to make its $5.5 billion payment for retirees' future health coverage.

Postmaster General Donahoe talks with Ali Velshi today on American Morning to explain the problems that the Post Office is facing and to discuss potential solutions.