US panel suggests USPS should close some offices

A presidential commission is recommending that money-losing post offices, many in small towns, be closed and that the Postal Service be given more freedom to change rates.

The President's Commission on the United States Postal Service, appointed by President Bush to make recommendations on the future of the postal services, began voting on proposals today.

While the commission rejects the idea of making the Postal Service a private company, several of its recommendations could have far-reaching impact on virtually all Americans if they are accepted by Congress and the president. The commission is to deliver its final report by the end of the month.

One recommendation calls for creation of a panel to study the postal network and recommend closings and consolidations of post offices.

"You don't necessarily need post offices, you need postal services delivered in the most convenient way," said the commission's co-chairman, Henry J. Pearce, chairman of the Hughes Electronics Corporation.

Kiosks offering a wide variety of mail services are being opened in shopping malls, Mr. Pearce noted, and postal services can also be made available in grocery stores, banks and other places.

Today's recommendations did not address the Postal Service's work force of about 850,000, though that is expected to be in the final report. Mr. Pearce said after the meeting that the work force needs to be "right-sized" in the face of automation and consolidation.

In many communities, the post office owns valuable, centrally located real estate that could be sold to raise income, the commission noted. In other towns, where the post office has been a center of activity, the agency might donate the facility to the local government for use as a community center or town hall.

The commission wants to see maximum local participation in the final decision on each office, said its other co-chairman, James A. Johnson, vice chairman of the merchant banking firm Perseus, L.L.C.

The Postal Service, which has some 35,000 offices across the country, has long sought to close those it considers unnecessary. Those efforts have often been thwarted by Congress when communities complained that their post offices were vital even if they did lose money.

With that in mind, the commission recommended that when a set of national recommendations is prepared for closings and consolidations, it take effect unless rejected in its entirety by Congress within 45 days.

Neal Denton of the Alliance of Nonprofit Mailers, a trade group, said he expected the report to get a warm reception in Congress.

A recommendation for more flexibility in setting rates is something the post office has sought for years, complaining often that the current process is too slow and cumbersome.

Under the commission's plan, an independent agency would establish rate ceilings, with postal management able to change rates below that level to meet market needs and compete with other delivery services.

"If any business in America had to operate under the constraints of the rate-setting process, it would be out of business," Mr. Pearce said.

Still, the commission said rates should be raised as seldom as possible.

And it said rates for services like first-class mail, where the Postal Service has a monopoly, should not be used to subsidize rates for items like overnight mail and parcel delivery, where the agency competes with other businesses.

The Postal Service suffered a loss of $676 million last year, but is hoping to end this year about $600 million in the black. The agency, which does not receive taxpayer money for operations, has seen a decline in mail volume two years in a row for the first time. Factors in that decline include a weak economy, anthrax deaths and increasing electronic commerce.

Elimination of the postal monopoly and privatization of the Postal Service have also been suggested. The commission rejected both ideas, though it said the agency should have a new, corporatelike board to govern it.

Richard J. Strasser, the Postal Service vice president and chief financial officer, did not comment directly on the recommendations, but lauded the commission, saying, "One has to be really impressed with the depth and quality of the recommendations they have put together."