Postmaster General John Potter defended the plan for a five-day delivery schedule before Senators Thursday. (Michael Beller/MNS)
WASHINGTON—Postmaster General John Potter once again stated the need Thursday for the United States Postal Service to transition to five-day delivery.
After testifying before a House committee last week, Potter reiterated his plea before the Senate Subcommittee on Federal Financial Management. Potter and Postal Service Inspector General David Williams also stressed the importance of getting back the $75 billion they say the USPS overpaid into the Civil Service Retirement Pension Fund.
“Our action plan provides us a solid path to ensure that the Postal Service remains strong, healthy and viable into the future,” Potter said.
While Sen. Tom Coburn, R-Okla., said eliminating Saturday delivery is “a net benefit economically,” he also said the Postal Service should be focusing on decreasing labor costs, which account for 80 percent of its expenses.
“To say we shouldn’t consider the terms of the labor input in solving this problem, [means] we’ll never solve it,” Coburn said.
Committee members also questioned why eliminating 17 percent of the delivery schedule would result in just 5 percent savings, a point raised by Sen. Daniel Akaka, D-Hawaii.
Potter responded by saying that gross savings would be greater than 5 percent but would be offset by reduced revenue, lowering the net savings. He also said that 90 percent of the Postal Service’s revenue comes from commercial entities that already don’t receive mail on Saturdays.
The Postal Service is staring a worst-case scenario of losing $238 billion over the next 10 years squarely in the face, according to the Government Accountability Office.
“We need to realize that the day of reckoning for the Postal Service may not come in 2020 or some other distant date,” said Chairman Sen. Thomas Carper, D-Del. “It could come next year.”
Potter said the Postal Service could cut costs by altering the manner in which it funds retiree health benefits. Those obligations currently cost about $5.5 billion annually, and with approximately 300,000 employees eligible for retirement within the next 10 years, spreading payments over a longer period of time may be a path toward viability.
Carper called restructuring the payment schedule for retiree health benefits “common sense.”
Potter stated that after exploring new revenue generating opportunities, it became clear the best way for the Postal Service to make more money is by spending less.
Williams said the Postal Service got “way too big before the economic downturn” and emphasized the urgency to get the USPS “right-sized.”
“We owe it to our customers to have an organization that is the proper size and we owe it to our employees to be as faithful to them as they have been to us,” Williams said.
Ruth Goldway, chairman of the Postal Regulatory Commission, emphasized that elimination of Saturday service is not a foregone conclusion. The PRC will consider the Postal Service’s proposal, but she said it could take nine months before it issues recommendations. Carper said the process shouldn’t take that long.
“If the 9/11 Commission took seven months and came up with 70 recommendations, my guess is you can beat that nine month timeline.”