U.S. Postmaster General tells subcommittee postal service moving forward but still needs help
Postmaster General John E. Potter told a Senate subcommittee that while the Postal Service continues on a path of growth and cost reductions, legislative change is still needed to put the Postal Service back on the path of financial stability. Testifying before the Subcommittee on Federal Financial Management of the Senate Committee on Governmental Affairs, Potter asked for a restructuring of the payment obligation required of the Postal Service to prefund retiree health benefits and that an adjustment be allowed for the current six-day-a- week mail delivery schedule.
While Potter did not limit his testimony to those two items, he said they “could generate the largest and most immediate financial benefits and move us toward narrowing our financial gap.” The 2010 payment the Postal Service is required to make to the Retiree Health Benefits fund is $5.4 b and the Postal Service is projecting that a five-day delivery schedule could save as much as $3.1 b. The Postal Service is expected to record a $7 b loss for FY 2010.
Potter also urged the subcommittee to examine a recent report issued by the Office of the Inspector General (IG) which found that due to an inequitable cost sharing methodology, the Postal Service has overpaid its share of Civil Service Retirement System payments by $75 b.
Potter said that while favorable consideration of the IG’s report would not eliminate the cost-cutting steps the Postal Service needs to take, “it would lessen the immediate financial crisis.”
Potter also told the subcommittee that the agency’s Action Plan for the Future was generating growth opportunities. He cited a current product test with Hallmark for Postal Paid Greetings, an initiative to increase the number of Post Office Boxes available for rent and the expansion of sites where passport transactions can be conducted.
He also said the Postal Service will once again feature a summer sale as it did in 2009 and that progress is being made with Priority Mail contract pricing and cubic pricing offerings. On the cost-reduction front, he said network alignment and workforce management initiatives are continuing and that cost savings are being captured by renegotiating transportation contracts and engaging in new ways to purchase supplies.
Along with retiree health benefit payment reform and an adjustment to the delivery schedule, other freedoms sought by Potter include: access to offer postal services in places other than traditional Post Offices, requiring arbitrators to consider the financial health of the Postal Service when deciding contract awards, allowing the Consumer Price Index price cap to be applied to all Market dominant products as to on a class by class application, and reform of the current Postal Service oversight regimen.
