Postal Service Seeks Transformation

The "fundamental right of universal mail service" must be preserved, according to U.S. Postmaster General John Potter.

But the bloated mess that is the United States Postal Service should be done away with, say several of Washington’s fiscal watchdogs.

Both sides agree: Something must be done with the Postal Service before it implodes.

On Friday, Potter unveiled a plan to transform the struggling service for the 21st century.

The plan says it can save the struggling quasi-government agency, currently losing over $1.5 billion a year, by shutting down non-productive local post offices and cutting delivery from six to five days per week. It also would cut out the middleman in bargaining agreements and set a goal of running a profit by being able to change rates with demand, a move that would require congressional approval.

"That would give us the right tools that are now open to private companies," like Fed Ex, which have been growing in productivity and profit, while the Postal Service has run deficits for the last several years, Potter said.

But down the hall from Potter's announcement at the National Press Club, groups led by Citizens Against Government Waste called the blueprint "business as usual."

"It’s we’ve-been-there-we’ve-done-that and it’s failing," said Leslie Paige, vice president of CAGW. "We think it falls relatively flat."

Paige said customers in rural areas don’t get door-to-door service now anyway.

"This is a $65 billion monopoly that is losing massive amounts of money," Paige said. "Their plan appears to leave the monopoly intact — what they seem to want is to just raise rates."

The Postal Service will raise postage rates this June — the second time in less than a year — to 37 cents a stamp from 34 cents a stamp in an attempt to climb out of debt and to pay for all of the new equipment it says it needs to deal with the anthrax threat in the wake of the Sept. 11 terrorist attacks. Congress has also agreed to give the agency $500 million for terror-related expenses this year.

Potter pledged there would not be another rate hike before 2004, but opponents say that the Postal Service using Sept. 11 to hide mismanagement is deceptive.

"That rate increase was in the planning stages before the terrorist attacks," said Edward L. Hudgins, author of The Last Monopoly: Privatizing the Postal Service for the Information Age.

Hudgins said privatizing the Postal Service to run the way Fed Ex and UPS do would allow companies to compete with one another to provide the same services while saving taxpayers billions of dollars on a system that wouldn’t work. Paige added rural customers would also benefit from better efficiency and availability.

But Potter said it's not as simple as that.

"Stakeholders overwhelmingly told us there was no support for a privatized mail service," he said Friday, charging that such a system would concentrate only on profits, while discriminating against the least profitable customer – like residents living in remote, hard-to-reach places.

"I do not believe that the American people want to privatize this service today," he said. "Like the digital divide, we do not need a delivery divide."