Bush Names Commission To Study U.S. Postal Service

In December President Bush named a nine-member commission to spend seven months looking into how to ensure the long-term viability of the U.S. Postal Service, despite declining mail volumes. President Bush recognizes that now is the time to reassess how the Postal Service should adapt to pressure from customers, competitors, and technology, and best fulfill its mission in the 21st century.

The commission's report, due July 31st, is expected
to result in the first reorganization of the
mail system since 1971

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 commission's report, due July 31, is expected to result in the first reoraganization of the mail system since 1971. The Commission will have a broad mandate to look into operations, structure and finances to see how the Postal Service can execute its missions more efficiently and cost-effectively. Industry officials say the commission will examine whether the USPS should have flexibility in setting prices, adjusting service levels and cutting costs.

Administration officials and lawmakers have worried about the long-term health of the Postal Service, which has been hit hard by competition from e-mail and the use of the Internet for paying bills. The agency also suffered disruptions after the anthrax mailings and the terrorist attacks on the Pentagon and World Trade Centers. The Post Office has lost $6 billion since 1971, and owes the government $11 billion, when borrowing from the taxpayer funds is included.
A recent indication of its financial problems, is the fact it delivered to 1.77 million more addresses, as mail volume declined by 4.6 billion pieces, during its last fiscal year.

The Postal Service is an independent governmental entity that relies on revenue from operations.
It does not receive taxpayer funding. It has not turned a profit since 1999, and in the fiscal year ending last September 30th, it lost $676 million, versus its original projection of $1.35 billion. Postmaster General John Potter said this loss was reduced through cost-cutting measures, including a reduction of 23,000 jobs through attrition. Another factor improving finances was the postage rate increase that took effect last June.

For the current fiscal year, officials project a surplus of $600 million. A windfall savings could be realized if Congress permits the agency to scale back payments to its pension fund. A recent review has found that the USPS is on a course to amass billions more dollars than it needs in its pension system, and it could mean a savings of $2.9 billion in fiscal year 2003.