Good Morning. Today the Subcommittee will hear from the United States Postmaster General John Potter.
Mr. Potter has testified at a number of hearings in the last few months on postal reform, terror attacks using mail, and other issues facing the Postal Service. It has been several years, however, since the Subcommittee has had the privilege of receiving testimony from the Postmaster General, and we are pleased to welcome you.
As a vital component of our nation’s economy, it is absolutely crucial that the Postal Service maintain its role as the Federal Post and maintain the solemn obligation of universal service. In doing so, it is undeniable that the Postal Service must change and adapt in order to provide an affordable service that continues to tie our nation together.
Without question, the United States Postal Service has confronted some significant challenges over the last few years. The current business model of the postal service is outdated and is not economically viable in the 21st century. The financial problems have been further complicated since the terrorist attacks that used the mail system to deliver biological weapons.
Even as the number of customers and addresses that the Postal Service serves has increased, the volume of first class mail has dropped steadily since 2001.
The Postal Service now faces stiff competition from a variety of electronic communications options that did not widely exist a few years ago as well as from private sector delivery services.
Furthermore, postage rate hikes have only caused consumers to further rely on alternative means of communications.
All of these factors have become a self-fulfilling prophesy of future postage rate increases to offset the declining volume of first class mail. And, as one who believes that a comprehensive postal service for all Americans – rural and urban – is one of the central elements of keeping the country connected, this first class revenue and volume dilemma is one we have to address and solve.
As difficult as these challenges are, the Postal Service is also charged with ensuring the safety of the mail. The anthrax attacks in 2001 and the more recent attacks using the deadly toxin ricin create a daunting overlay on every aspect and element of the Postal Service’s operation.
I need not elaborate any further on the challenge this presents to the Postal Service and look forward to hearing what steps are being taken to try to prevent these attacks from happening in the future. I would also appreciate learning about your plan for screening the mail to provide for the safety of Postal customers and Postal employees while also ensuring timely delivery. In the wake of the anthrax attacks, Congress provided the postal service with emergency funding to decontaminate sorting facilities and to procure biohazard detection equipment. The postal service has used this funding to install sensors that detect anthrax at several facilities.
I have been told, however, by the General Accounting Office and others that the system cannot adequately detect for other agents. I am concerned that the prior investment may be too focused on reacting to the last threat and not focused enough on detecting other threats.
The Postal Service submitted a budget request to Congress that includes $779 million for emergency preparedness activities. This funding, however, was not included in the President’s budget. I hope you will discuss the next steps for the Postal Service and what sort of investment we can expect in future years.
I would also like to discuss the reform plans that you have put in place and those legislative reforms that the Postal Service is pursuing in order to properly transform itself into a self-sustaining enterprise.
The Postal Service has several advantages that are relevant in the 21st century. It is the only delivery service capable of reaching every household in America, by providing direct access to each and every mailbox. It connects communities, particularly those in rural areas. It also presents tremendous potential for those mailers who desire to reach one-hundred percent of the population in a given community or area.
I look forward to hearing your thoughts, Mr. Potter, on how best to leverage these and other of the Postal Services’ unique attributes into increased revenues and market growth.
The Postal Service has been granted significant relief from its retirement obligations through the recently-enacted Postal Civil Service Retirement System Funding Reform Act. I would appreciate hearing your perspective on how the Postal Service expects to utilize these newly available resources. As part of any serious reform effort, the Postal Service must improve its focus on its core services. It has not been an effective competitor in commercial activities that are unrelated to its traditional responsibilities, and these forays have diverted funds from other necessary expenses.
In addition, the post office must not lose sight of its efforts to control its costs. I commend the Postmaster General for streamlining the workforce by 10 percent over the last five years, without layoffs. This is a good start, but more cost-cutting measures will be needed to reshape the Postal Service into a self-sustaining, commercially viable enterprise.
We have basically two tacts we can take. We can either do things better or do things differently. We hear time and time again about processes that private businesses have put in place to become more competitive.
Perhaps now we should find ways to challenge the postal service to bring their costs into line with what is offered in the domestic marketplace. And, perhaps now is the time to pursue reforms and performance measures that focus the Postal Service on those things that no one else can do and encourage American businesses to provide those services that they can do better.
The Revenue Forgone Reform Act of 1993 retains free postage for the visually impaired customers and for overseas absentee balloting materials. To pay for these services, the Act provides for an annual $29 million appropriation to continue through 2035. Since 1994, the Postal Service has used this annual appropriation to pay off debt it accumulated in the early 1990s. In reviewing the Administration’s budget request, I found that no funds were provided.
In recent years, some have suggested that the postal service should reduce its days of operation as well as the scope of its service to rural areas of the country in order to cut costs. I am heartened that you and the Service have steadfastly resisted such short-sighted so-called reforms.
In the course of your testimony today, I hope that you will renew your commitment to maintaining universal, six-day-a-week service.
Mr. Postmaster General, as encouraged as I am by your defense of affordable universal service, I am concerned that the current moratorium on new construction has left many communities without adequate facilities for the dispatch and delivery of U.S. mail. For universal service to be meaningful, it must be reasonably accessible and convenient for customers.
It is my express hope that you will, today, outline the Postal Service’s plan for again investing in the communities to which its service and presence are so vital and for innovative arrangements to keep the rural communities connected through the Post Office. Again, I welcome you before the Subcommittee today and look forward to discussing these important matters during the question-and-answer period. With that, I yield to Senator Murray for her opening statement.
