Ted Stevens, the Senate’s second-ranking Republican and long-time supporter of the U.S. Postal Service, said he is opposed to any legislative attempts to increase the financially ailing agency’s authority to set its own prices.
The Alaska Republican, who helped write the Postal Reorganization Act of 1970 creating the USPS out of the old Post Office Department, said there was no reason to change the law, that the USPS was “doing just fine” as it is.
Stevens, who is also the ranking GOP member of the Senate Appropriations Committee, said changing the law to reform the USPS before 2015 would be “ill-advised” because of the rapid changes underway in the communications industry.
Instead of changing the law, Stevens said he would rather see Congress give the USPS, facing a projected $1.5 billion debt this fiscal year, “several hundred million dollars” over the next 12 years so it could become fiscally sound again.
He made the comments while attending a Senate subcommittee hearing on the postal service’s proposed transformation plan chaired by Sen. Daniel Akaka (R-HI), who also had reservations about the postal service’s proposal.
At one point in the hearing, Akaka said the USPS should get its house in order before Congress would “consider giving it more flexibility” to set prices, enter into negotiated service agreements with high-volume mailers, and introduce new products and services without first seeking the support of the Postal Rate Commission.
However, testifying before the panel, Postmaster General John Potter said the plan “offers the flexibility to give the USPS the long term tools it needs” to become a viable and self-sustaining government service again.
According to the PMG, the USPS expects to lose $1.5 billion this fiscal year, primarily because of the turndown in the nation’s economy and the after-effects of Sept. 11 and the anthrax scare. Postal officials, he said, anticipate a decline in total mail volume of 6 billion pieces, “the most significant decline in more than 70 years.”
Co-incidental to the PMG’s testimony, the USPS said as of April 22 it’s loss for the year is $285.1 million, double the amount on the same date as last year. Although the USPS had projected by that date it would take in $43.3 billion, it only grossed $41.3 billion, or 0.8% less than the $41.6 billion taken in the year before.
At the same time, it reported that expenses for the first eight of its 13, four-week accounting periods totaled $41.5 billion or $1.3 million less than the $42.9 billion it projected.
Postal officials also reported that between the start of its fiscal year in September and April 22 the volume of Standard (advertising) Mail dropped 6.3% to 54.6 billion pieces versus 58.2 billion pieces a year earlier. But revenue from Standard Mail only fell 2.1% to $9.8 billion from $10 billion during the period.
The USPS also said international mail declined 21.9% to 587.2 million pieces from 751.7 million pieces, resulting in a 10.2% drop in revenues, $1 billion versus $1.1 billion the year before.
The USPS also reported a 13% decline in priority mail volume, and an 11.7% falloff in Express Mail. These drops resulted in a 9.7% revenue decline–to $624.8 million.
First-class mail volume fell by 1.5% to 64.2 billion pieces, but income from that category dipped only 0.1% to $22.5 billion. Periodical mail volume is down by 4.2% to 6 million pieces.
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