New Panel Would Assess Post Office

AP via NYTimes.com ^ | 12/11/2002

[GeneD]

Filed at 10:04 a.m. ET

WASHINGTON (AP) -- President Bush signed an order Wednesday creating a commission to explore the U.S. Postal Service's mission and operations during a time of increasing competition from private companies and challenges from new technology, including electronic commerce over the Internet.

The commission, which would include members of the business community, would make recommendations to President Bush sometime next year, according to Postal Service official, who spoke on condition of anonymity.

The panel's recommendations -- depending on their magnitude -- could result in the first major overhaul of the Postal Service since the early 1970s, the official said.

One of the biggest challenges for the service currently is how to balance providing affordable mail service to communities across the country, something known as ``universal service'' and trying to be financially sound.

The universal service requirement calls on the agency to provide First Class mail delivery to everyone in the country at a uniform price.

Of the service's 30,000 offices around the country, about half of them are not profitable, according to the Postal Service official.

However, Congress limits the post office's ability to close local offices, which are often seen as community hubs and gathering places.

The administration's choice to head the commission are Harry Pearce, chairman of Hughes Electronics Corp., the satellite-television company controlled by General Motors, and James Johnson, former chief executive of mortgage giant Fannie Mae who is now chairman of The Brookings Institution, a think tank in Washington, D.C.

The Postal Service and the Treasury Department were slated to make a joint announcement of the new commission on Wednesday. The Treasury Department declined to comment.

On Tuesday, the Postal Service said it ended its 2002 fiscal year in the hole -- but it was less red ink than expected.

The Postal Service lost $676 million in the last fiscal year, which ended Sept. 30, about half of the budgeted loss of $1.35 billion.

A work force reduction of 23,000 employees through attrition helped slice the loss. In addition postal rates increased in June, raising the price of a letter 3 cents to 37 cents.

Mail volume has continued to drop, even though 1.77 million new delivery addresses were added. Volume fell by 4.6 billion pieces in the past year, which officials attribute to the Internet, fewer people writing letters, more competition and a poor economy.

Last month, the Postal Service reported that a new financial review found it had been overpaying into the Civil Service Retirement System. Should Congress decide to fix the discrepancy and reimburse the money, another rate increase could be delayed until 2006, Postal officials have said.

Earlier estimates for large losses at the Postal Service were made after the Sept. 11, 2001, terror attacks and the anthrax-by-mail contamination the following month cost the agency many millions of dollars. Anthrax alone cost $84 million.

Over the years, legislation to revamp the Postal Service has languished. Recommendations from the presidential panel might help break that logjam, the Postal official said.

The Postal Service operates under a law developed by a presidential commission in the early 1970s. It does not receive a taxpayer subsidy for operations and is required to pay its way from revenues and to break even over time.

Postal managers have contended in recent years that the long a clumsy system that takes nearly a year to change rates limits their ability to compete with private firms and to offer new types of service.

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On the Net:

U.S. Postal Service: http://www.usps.com

[ravingnutter]

Privatization bump...

Sounds good to me...privatize it under performance-based contracts...reduces Govt. and props up the economy by creating new jobs! Then maybe I would actually get my mail instead of it ending up in the next neighborhood...

[End The Hypocrisy]

Think of how much the cost of mailing a simple letter has increased over time, even as service has declined. What other industries have seen such exorbitant price increases?

Anyhow, here's a similar article:

http://www.washingtonpost.com/wp-dyn/articles/A39854-2002Dec11.html

President Bush today named a commission to look into privatizing part of the [heavily unionized and inefficient] United States Postal Service. The investigation is part of Bush's plan to allow private contractors to compete for nearly half of the government's civilian jobs in coming years. The post office has lost $6 billion since 1971 and owes the government $11 billion when borrowing from taxpayer funds is included, according to administration figures. USPS finances were recently improved by a postage rate increase that took effect in June, though, when the cost of a first-class stamp went up 3 cents, to 37 cents. Officials have projected a surplus of $600 million this fiscal year.