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At hearing on future of Postal Service, no dearth of despondency

By Joe Davidson
Friday, November 6, 2009

A congressional hearing on the future of the U.S. Postal Service can be one depressing experience.

The sky outside the Rayburn House Office Building was bright Thursday morning, but it was all gloom and doom in Room 2154.

Members of a Committee on Oversight and Government Reform panel explored novel ways the Postal Service might pull itself from deep debt -- selling birthday cards, for instance -- but what they heard was apprehension about the future and dismal reports about the past.

The title of the session, "More Than Stamps: Adapting the Postal Service to a Changing World," conveyed the possibility that if only the neighborhood post office could sell more than its traditional range of goods and services, it might be able to catch up with a world that seems to have left it behind.

Meanwhile, one way to save the Postal Service big bucks -- delivering mail five days a week instead of six -- was largely ignored. The panel had discussed it before and probably will need to again, because the avenues they explored Thursday don't seem to go very far.

Several speakers acknowledged the $4 billion in savings, through a modification of USPS retiree health benefit fund payments, that Congress approved in September. That was one leg of a two-pronged strategy that postal officials would like to pursue to save enough money to rescue USPS from financial ruin.

The other prong sat like an elephant in the room whose presence was only briefly acknowledged. Officials estimate that the elimination of Saturday delivery could save up to $3.5 billion annually. Going to five-day delivery is an integral part of the Postal Service's effort to "aggressively bring down our costs," said Robert F. Bernstock, president of mailing and shipping services.

But members of Congress are wary of cutting delivery days, no matter how strong the Postal Service's arguments.

Rep. Gerald E. Connolly (D-Va.) apparently believes Saturday delivery is central to our well-being. He said that "the ability of the Postal Service to deliver mail quickly on six days of the week . . . protects our constituents' quality of life," in addition to facilitating business advertising and product distribution.

USPS officials would like congressional permission for post offices to sell items such as pens, markers and presentation folders, along with banking, insurance and telecommunications products. Already, some branches, including the one at L'Enfant Plaza, sell greeting cards as part of a pilot project.

Bernstock said selling services to federal, state and local agencies, such as the passport services USPS now provides for the State Department, is another way to make money. Allowing drivers to renew their licenses at post offices would fall in that category.

And Connolly suggested the Postal Service could "work in partnership with community banks to integrate banks in post offices in a manner that would help both existing community banks and the Postal Service."

Rep. Stephen F. Lynch (D-Mass.), chairman of the subcommittee on the federal workforce, Postal Service and the District of Columbia, noted that Postmaster General Jack Potter, who wasn't at the hearing, likes to point out that the agency has more retail outlets than McDonald's, Starbucks and Wal-Mart combined. Maybe if USPS sold cheap burgers, overpriced coffee and everything from toilet seats to television sets, it could get in the black.

Lynch opened the hearing by saying it would "examine the steps the Postal Service has taken and the results achieved so far in this area."

The sad truth is that no one, not Bernstock, the other experts who testified or committee members, expressed any expectation that product diversification could overcome the $7 billion loss facing the agency. There's no point in counting on revenue-generating initiatives alone to close the Postal Service's financial gap, Bernstock told the panel. "This is clearly not realistic," he said.

Past USPS projects to generate revenue have achieved only "limited results," a Government Accountability Office official, Phillip Herr, told the subcommittee. Those projects included a "summer sale" that cut rates for large-volume mailers during a generally slow period.

History provides no comfort. "USPS lost nearly [a total of] $85 million in fiscal years 1995, 1996, and 1997 on 19 new products, including electronic commerce services, electronic money transfers, and a remittance process business, among others," according to Herr's report.

Taking all this in didn't leave anyone feeling good.

"I'll try to be as optimistic as possible," said a pessimistic-sounding Rep. Danny K. Davis (D-Ill.).

Closing the hearing, Lynch summed up the feeling in the room: "I think this panel has suffered enough."

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