Postmaster General John Potter is expected to ask Congress Thursday for up to $10 billion to help the cash-strapped U.S. Postal Service deal with effects of the Sept. 11 and anthrax attacks.
Potter, with the support of most industry groups, will ask the Senate Appropriations Committee, chaired by Sen. Robert Byrd (D-WVA) to support the special appropriation when he details the postal service’s sagging financial condition.
Robert McLean, Mailers Council executive director, predicted that Potter would ask for “between $6 billion and $10 billion.” He said that money would cover postal service costs of buying, installing and training postal personnel in the use of irradiation equipment to free the mail stream of anthrax.
Without a special infusion of money from the federal government, McLean said the USPS, which is seeking its third rate increase in less than two years, would have to seek even higher rates.
Neal Denton, Alliance of Nonprofit Mailers executive director agreed, saying that “Congress has to come in and rescue the postal service because if it doesn’t we may be seeing the end of the national mail network as we know it.”
Noting that there are still a lot of unseen costs resulting from both the anthrax and Sept. 11 terrorist attacks, Denton saw Potter asking Congress for at least $7 billion.
Direct Marketing Association senior vice president Jerry Cerasale also supported Potter’s request for a special appropriation.
“We think that the security of the mail and trying to keep the mail as a viable option [of communication for direct marketers] is an important cog in the national economy and congress should make every effort to keep the USPS afloat and as secure as possible,” he said.
Without a federal bailout, the USPS would have to look to mailers to pick up the costs with “a rate increase so great that it would force many of them out of business,” Cerasale said.
Tuesday, in a report to the postal service’s Board of Governors Richard Strasser, CFO/executive vice president, said that during the last two months mail volume dropped 10%, resulting in a loss of $500 million, lifting the deficit for the year to just about $1.4 billion. (DIRECT Newsline, Nov. 7).
If Congress grants the special appropriation it would be the first time in has done so in 20 years. In 1981, the government gave the USPS $486 million to help it stay afloat and a year later it gave the USPS $12.1 million.
While Potter and other postal officials would not discuss Potter’s request or what he will tell the panel, several industry officials predicted that the PMG will ask for more than just $5 billion.
In a related development, the USPS has raised its reward offer for information about the anthrax attacks to $1.25 million, thanks to a $250,000 contribution from saturation mail firm Advo.
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