WASHINGTON (AP) — The U.S. Postal Service is increasing the pressure for dropping Saturday home delivery as it seeks to fend off massive financial losses.

Postmaster General John Potter, who has a speech set for later Tuesday on the future of his agency, will also raise the likelihood of higher postage rates.

The agency was $297 million in the red in period from October through December, usually its best season because of holiday mailings.

The post office's problems stem from a sharp decline in the number of items mailed, resulting from the recession and the movement of things like bills and bill-paying to electronic communications.

Last year the agency handled 177 billion items, down from 213 billion in 2006 — and there is little likelihood of an increase in the future.

The Postal Service has previously proposed eliminating delivery six days a week, but got a cold reception in Congress. The renewed effort comes with a series of consultant reports supporting that idea, as well as changes in the work force and the number of offices.

The post office does not receive a taxpayer subsidy for its operations, and officials see little chance of Congress approving such a payment.