The U.S. Postal Service, facing rising costs and shrinking business, asked Congress Thursday for a law change overhauling its operations.
The plan would allow the USPS to phase in price increases on a regular basis and give it the authority to close some offices and, if necessary, eliminate Saturday mail delivery.
The USPS said that without those and other changes in the law it faces a worsening financial disaster.
In a luncheon speech before the National Press Club Friday, Potter also stressed that the USPS must continue its efforts to cut costs. In this vein, he announced that the USPS will immediately lift the moratorium it had imposed on closing post offices and will now see if it could do so without hurting service. At present, about 500 post offices around the country have been “suspended,” without being shut down outright, he said.
“It was a very important speech and I hope it wakes the White House and Capitol Hill up to just how much financial trouble the postal service is in,” said Bob McLean, executive director of the Mailers Council.
“And he put everything out there for discussion,” added McLean, noting that many of Potter’s proposals require legislative change, “and there are only a few people in Congress who take an interest in the USPS.”
McLean said he was in basic agreement with all the proposals, which are also necessary since the Postal Service’s current mail volume drop is the most severe since the Great Depression in the 1930s.
“Based on an initial reading of the executive summary of a more-than 450-page document, we believe that the postal service intends to move forward immediately and in a direction that will help to put it on a more financially sound footing,” Direct Marketing Association president/CEO H. Robert Wientzen said in a statement.
Gene A. Del Polito, Association for Postal Commerce president said the postal service’s proposed plan sounded better than had been expected as Neal Denton, Alliance of Nonprofit Mailers executive director, predicted that mailers would be “pleased with it.”
During his speech, Potter kept saying that the USPS was intent on finding ways to generate more revenue in order to guarantee continued universal service.
Potter also called on Postal Rate Commission Chairman George Omas to help him implement these changes.
By law, the USPS, which last year lost $1.6 billion, must seek the support of the independent Postal Rate Commission before raising rates or closing any of its facilities.
The proposed plan also calls for a long-term restructuring of the postal service’s operations so it could become a commercial government enterprise using market-base pricing methods, including discounts and negotiated service contracts with mass mailers.
Other proposed changes include: the unrestricted introduction of new products and services; easing existing purchasing rules; less cumbersome and restrictive labor contract negotiations and dispute mediation.
S. David Fineman, vice chairman of the postal service’s Board of Governors told the Washington Post that after legislative revamping, the USPS might look something like Fannie Mae, the congressionally chartered, but privately owned mortgage lender.
Postmaster General John Potter and other top postal officials, including members of its Board of Governors, are expected to be grilled thoroughly about their proposal when they appear before the two congressional committees that asked for the plan.
They are the House Government Reform and Senate Government Affairs Committees.
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