By Elvina Nawaguna
WASHINGTON, March 21 (Reuters) - The financially beleaguered Postal Service suffered a setback in its plan to end Saturday delivery of first-class mail as Congress on Thursday passed legislation requiring six-day delivery.
The Postal Service, which lost $16 billion last year, had announced last month its plan to switch to five-day mail service to save $2 billion annually.
No law requires the Postal Service to deliver mail six days a week, but Congress has traditionally included a provision in legislation to fund the federal government each year that has prevented the Postal Service from reducing delivery service.
The House of Representatives on Thursday gave final approval to the legislation, known as a continuing resolution, that maintains the provision, sending it to President Barack Obama to sign into law. The Senate approved the measure on Wednesday.
"Once the delivery schedule language in the Continuing Resolution becomes law, we will discuss it with our Board of Governors to determine our next steps," said David Partenheimer, a spokesman for the Postal Service.
Several polls have shown a majority of the public supports ending six-day delivery of first-class mail.
The Postal Service has said that while it would not pick up or deliver first-class mail, magazines and direct mail, it would continue to deliver packages and pharmaceutical drugs.
The plan for a new delivery schedule, Partenheimer said, would respond to the customers' changing needs and would help keep the Postal Service from becoming a burden to taxpayers.
The Postal Service, an independent agency not funded by taxpayers, has said it could need a taxpayer bailout of more than $47 billion by 2017 if Congress does not give it flexibility to change its operations.
It had planned to drop first-class mail delivery in August.
Ending six-day first-class mail delivery is part of the Postal Service's larger plan to cut costs and raise revenues.
The mail carrier loses $25 million each day, as more Americans communicate by email and the Internet, and as heavy mandatory payments into its future retirees' health fund take a toll.
The Postal Service could run out of money by October if Congress does not provide legislative relief, some experts have estimated.
A number of lawmakers and trade groups said the plan to cut Saturday mail service is illegal because the Postal Service requires Congress' approval before it makes such a decision.
But others such as Republican Representative Darrell Issa of California and Republican Senator Tom Coburn of Oklahoma have supported the Postal Service's delivery schedule plan.
Last week, Coburn introduced an amendment to the spending bill to strike down the requirement for six-day mail delivery and give the mail carrier more control over its operations. But that amendment failed.
Ali Ahmad, a spokesman for Issa, said there may still be some room for the Postal Service to change its delivery schedule. Ahmad said that although the spending measure maintains the six-day delivery language, it is vague and does not stop the Postal Service from altering what products it delivers on Saturdays.
(Reporting by Elvina Nawaguna; Editing by Karey Van Hall and Vicki Allen)