Postal service requests overhaul

Operation needs reform to assure its survival, postmaster says

? The guarantee of mail delivery to every corner of the United States at the same postage rate could end if Congress does not agree to changes in the way the financially troubled U.S. Postal Service operates, Postmaster Gen. John Potter said Friday.

Potter unveiled a new master plan intended to assure the Postal Service’s survival that includes such contemplated “bold actions” as possible post office closings and consolidations, suspension of Saturday delivery and a freer hand in raising postal rates as part of a new master plan to assure its survival.

“If we don’t accomplish transformation now, the universal (mail) service we rely on will be in jeopardy,” said Potter, outlining the plan in a speech to the National Press Club.

He said he wasn’t necessarily recommending the actions, but they would be under consideration.

Requested by the Government Accounting Office and the Senate Government Affairs Committee, the plan was outlined as the Postal Service staggers under $1.7 billion in losses in the last fiscal year.

Its board of governors next week takes up a request for a rate increase from 34 cents to 37 cents for first-class mail, which Potter promised would be the last until 2004. The increase would take effect this summer.

In addition to concern about the competition the service faces from e-mail, faxes and other forms of electronic communication, the Postal Service plan also attempts to deal with costly new security burdens it has shouldered since last fall’s terrorist attacks and anthrax panic.

Fears have been raised that the more the Postal Service raises its rates, the more it will drive customers to other media, therefore triggering more rate hikes.

In a report it issued in February, the GAO warned that “USPS’s financial outlook is becoming increasingly dire.”

Potter’s plan, which was submitted to the Senate Governmental Affairs Committee, offered the Congress three choices for reform of the Postal Service:

l Restoring it to status as a government agency concentrating on mail delivery an abandonment of the autonomy it was given when the Congress made it an independent, supposedly self-supporting federal entity in 1970.

l Converting it into a private corporation that would compete with other private sector mail delivery companies, a move that would deprive postal workers of their civil service protections.

l Transforming it into a “commercial government enterprise” that would retain its federal status but allow it to expand its various business ventures and base its pricing on a competitive market.

The Postal Service strongly indicated it prefers the commercial government enterprise form.

Critics were quick to rise in opposition to the plan, calling for a thorough reform of what they charged was a waste-ridden, backward bureaucracy and ultimately a completely free-market capitalist approach to mail services.

Speaking at a news conference held before Potter’s speech, Leslie Paige, vice president of Citizens Against Government Waste, called the transformation proposal meaningless in terms of real reform.

“What they simply want is the freedom to raise rates,” Paige said. “The Postal Service’s accounting practices are in such shambles that it’s anyone’s guess what the bottom line is.”

Rick Merritt, executive director of the PostalWatch advocacy group, one of seven other organizations taking part in the news conference, complained that the Postal Service, with 900,000 full- and part-time employees and expenditures of $65 billion a year, has gotten too big and expanded too far into private business activities.

“The USPS diverts money derived from its federally protected mail monopoly and spends it to compete against the private sector,” he said. “It leverages its regulatory advantages, governmental exemptions and monopoly-subsidized delivery infrastructure to undercut private sector competitors. Yet in the end, it is unable to make any money from these ventures.”