POSTAL SERVICE HALTS PROJECTS
POSTAL SERVICE HALTS PROJECTS
From SUN HERALD, March 9th, 2001
By BY RANDOLPH E. SCHMID / THE ASSOCIATED PRESS – The U.S. Postal Service is freezing hundreds of new construction and leasing
projects across the country, saying the agency is facing serious financial
losses. The announcement Thursday was accompanied by a warning from the postal
governing board that universal service to every home every day could be in
danger without changes to the laws that regulate operation. More than 800 projects in all states will be affected by the freeze.
Information about specific regions and states was not available Thursday.
Postal officials also didn’t provide a dollar estimate for the affected work. While first class mail went up a penny to 34 cents in January, several
increases in other types of mail that had been sought by the agency were
rejected or trimmed by the independent Postal Rate Commission. With rising
costs, postal officials now say they face a $2 billion to $3 billion loss this
fiscal year. They are planning to apply this summer for another rate increase
to take effect next year. After five years in the black, the post office had a $199 million loss last
fiscal year. Among the problems cited by the Postal Service are wage rate increases that
exceed the rate of inflation, escalating fuel costs, changes in the type of
mail being processed, a communications marketplace marked by increased
competition and forecasts calling for the diversion of some first-class mail
to electronic alternatives. The construction and leasing freeze affects facilities that the agency has
made commitments to but where construction has not yet begun. “All new construction, new leasing and expansion planned for 2001 is frozen,”
postal spokeswoman Judy de Torok said. A few projects will continue if needed for health and safety reasons, she
said. Meanwhile, the universal service that Americans take for granted could be in
jeopardy unless laws regulating operations are changed, said the postal
governing board. “Regrettably, our call for an additional rate increase, following so soon
after the last one, reflects the fact that the 30-year-old statutory model
that governs the Postal Service is in need of change to protect universal
service at affordable rates,” said board chairman Robert F. Rider. For the past several years postal leaders have sought changes in the law to
give them more flexibility in changing rates and services to cope with rising
costs and changes in competition. Under current rules it takes nearly a year
to change rates. Long negotiations and hearings produced a bill they felt would solve many of
their problems last year, but the measure never came up for a vote and died
with the end of the last Congress in January. Feeling increased financial
problems, the postal governors this week asked the Rate Commission to
reconsider the changes it made in their request. They also sent a letter to President Bush seeking his assistance in getting
legislation to provide them more freedom to operate. Universal service to every address at uniform and affordable rates has been a
requirement since the founding of the nation. For years Congress subsidized
the service, but when the current system was created in the 1970s the
subsidies were phased out, and the post office no longer receives taxpayer
money for its operations. Copyright (c) 2001, The Sun HeraldSUN HERALD, 09th March 2001
