Critics say Postal Service reform plan is weak

Postal Service stakeholders on Friday gave mixed reviews to Postmaster General John Potter's plan to transform the agency into a profitable business venture.

Potter announced the details of the Postal Service Transformation Plan Friday at the National Press Club in Washington. The plan includes recommendations to let the agency keep its profits, give the agency greater flexibility to set prices for its mailing services, close postal offices and consider allowing Postal workers to go on strike.

"If we don't accomplish transformation now, the universal mail service we rely on will be in jeopardy. The legislation of 32 years ago no longer allows us the ability to effectively change in today's technological marketplace," Potter said.

At a press conference held before Potter's announcement, Citizens Against Government Waste, a Washington-based nonprofit organization, blasted the plan.

"It falls flat," vice president Leslie Paige said. "One seeks in vain for anything transformational in this plan. It's long on rhetoric and short on details."

Paige and some other critics of the plan want the Postal Service to be privatized, one of three transformation options explored in the 450-page plan. The Postal Service's two other options are to revert back to an entirely government-owned and run entity or to become a commercial government enterprise, the option Potter favors.

According to Potter, operating as a commercial government enterprise would put the agency on a more "business-like footing." This recommendation would allow the agency to "offer both traditional and nontraditional products and implement market-based pricing, discounts and incentives and business-based financing," the report said.

Currently, the Postal Service is self-funded, drawing less than 1 percent of its operating budget from the general treasury. As of late March, revenue was $1.5 billion below the agency's expectations for the fiscal year and mail volume had decreased by 4.5 billion pieces.

But Robert McLean, executive director of the Mailers Council, an Arlington, Va. trade association, said privatization is not the answer to the agency's fiscal problems.

"Who would buy it?" McLean asked. "This is an organization that has almost $13 billion in debt, has a multi-million-dollar pension liability and the only way to make money is by raising rates, which lowers volume, which requires you to raise rates again."

Potter's recommendation, to make the agency a commercial government enterprise, opens up a much-needed discussion about what the public wants from the Postal Service, McLean said.

"He took the more conservative road," said Gene Del Polito, president of the Association of Postal Commerce, a trade group representing mailers. "I would not call it a radical proposal at all. Sure, there will be some gnashing of teeth, but it will very, very hard to argue against taking the steps that he has laid out for his immediate course of action."

Potter's first step will be to try and update the existing process for setting mailing rates in conjunction with the Postal Rate Commission and using the existing regulatory framework, said Deborah Willhite, the agency's senior vice president for government relations and public policy.

"If there is a way to do that we will. If not, we go to Congress and seek new regulations," Willhite said.

Agency officials also plan to meet with both the Postal Board of Governors and members of Congress next week to discuss the plan.

Sen. Daniel Akaka, D-Hawaii, wants Potter to testify before the Senate Governmental Affairs Subcommittee on International Security, Proliferation, and Federal Services in the next few weeks.

"There are key questions that must be examined," Akaka said in a written statement. "The answers to these questions and others are critical to the success of the transformation plan both in and out of Congress."