Bush government reform adviser could get Postal Service slot

Former Indianapolis Mayor Stephen Goldsmith, a key adviser to President Bush on government reform issues, is the leading candidate to become the next postmaster general, according to Postal Service sources.

Current Postmaster General William Henderson, a 29-year postal veteran who has been in the top job for three years, has announced he will leave his post next month. Henderson's retirement comes in the middle of a fiscal year in which the Postal Service is projecting a financial shortfall of up to $3 billion.

The agency is gearing up to propose another rate hike this summer, following a 4.6 percent increase that took effect in January. The Postal Service is suffering from the economic slowdown, higher-than-expected workers compensation costs, spikes in fuel prices and new labor contracts.

Goldsmith's close relationship with Bush during his presidential campaign puts him at the top of a list that includes such notable agency insiders as Deputy Postmaster General John Nolan, Chief Operating Officer Jack Potter and John Kelly, president of package services. The Postal Service board of governors, which hires the postmaster general, has made legislative reform a top priority for the coming year.

Goldsmith could not be reached for comment, and his level of interest in the job remains unclear. Nonetheless, reform advocates are glad to hear that his name is in the mix. "He has the political clout and the juice to get reform moving in the White House," says Gene Del Polito, president of the Association of Postal Commerce. "He's been a mayor, so he knows how to deal with unions and how to handle a bureaucracy." Beyond the pending financial crisis, the next postmaster general will have to deal with several serious management issues, including reducing the size of the Postal Service's nearly 800,000-person workforce, adversarial labor relations and improving organizational efficiency. Agency sources suspect that the board is reluctant to select an insider. "It would be a surprise if [the board of governors] allowed someone to move up after seeing what Henderson did. We need someone who is going to come in and not be afraid to make some serious changes," a USPS source said. Union officials did not return calls seeking comment on the situation. Robert McLean, executive director of the Mailers Council, a trade group in Arlington, Va., says mailers are hoping for a postmaster who will "come in and shake things up" and improve efficiencies. Goldsmith is best known for privatizing nearly 70 public services in Indianapolis. But his real innovations were in economic development, says Mark Rosentraub, a former University of Indiana professor who wrote about Goldsmith's efforts in Indianapolis. Rosentraub, now dean of Maxine Goodman Levin College of Urban Affairs at Cleveland State University, worries that the former mayor could become frustrated by USPS' dual mandates to act like a business and provide affordable service to every address in the country. To meet those mandates, Postal Service leaders say they need more flexibility in dealing with labor and setting prices. The message appears to be taking hold in Congress. "The Postal Service operates under an outdated statutory framework that does not provide the agency with practical and adaptable solutions to compete in today's rapidly changing and truly global communications environment," House Government Reform Committee Chairman Dan Burton, R-Ind., wrote President Bush on April 23.