Postmaster General John Potter leads a cry for retrenchment

By Ed O'Keefe
Washington Post Staff Writer
Monday, May 10, 2010; A15

NASHVILLE -- The man who wants to end Saturday mail delivery is pressed for time. The way Postmaster General John E. Potter sees it, he has less than six months to convince Congress and the nation of the urgent need to retool the U.S. Postal Service for the 21st century.

By fall, the Postal Service won't have enough money to make payroll, Potter predicts. But big customers, regulators, lawmakers and organized labor still have to be won over.

Which might help explain Potter's stark assessment. He wants Congress to roll back a law requiring the Postal Service to prepay retiree health benefits. But he also wants the flexibility to change the business model -- by dropping Saturday deliveries, replacing post offices with outposts in suburban supermarkets and cutting hundreds of thousands of jobs through attrition.

"We're losing money, we're running out of cash," Potter said in an interview. "Ideally, what you'd like to do in the Postal Service is have access to about $5 [billion] to $6 billion in cash . . . and that's basically two payrolls. That's not a lot of breathing room."

The Postal Service said Thursday that it lost $1.9 billion in the six months that ended March 31. Mail volume also dropped 6.3 percent compared with the same period a year earlier. It's set to deliver about 11 billion fewer pieces of mail and lose about $7 billion by the end of its fiscal year in September. In the next decade, Potter estimates, the agency will lose hundreds of billions of dollars if Congress doesn't act and postal workers don't retire fast enough. A recent Washington Post poll found that nearly as many Americans trust e-mail to send messages reliably as they do the Postal Service, meaning inboxes might soon overtake mailboxes as the nation's preferred delivery point.

The "PMG" (as he's known at the L'Enfant Plaza headquarters) has spent most of his nine-year tenure adapting the Postal Service to a faster-paced world. At times, it's clear his patience is running short.

The next big thing

A few weeks before the recent flooding in Nashville, the Postal Service's largest customers flocked to Gaylord Opryland Resort for the National Postal Forum, the USPS's version of an annual shareholders' meeting. At 54 years old, Potter oversees a quasi-government agency enshrined in the Constitution but required by law to act like a business. The Postal Service employs about 594,000 people, operates roughly 36,000 postal facilities and owns more than 220,000 vehicles, making Potter the nation's second largest civilian employer, its largest retail manager and owner of the world's largest vehicle fleet. He is paid $276,840 a year before deferred compensation and his pension, serves at the pleasure of the Postal Board of Governors, and routinely consults with the Postal Regulatory Commission.

Burly and 6-foot-4, Potter spent his time in Nashville glad-handing workers, pitching Postal Service goods and delivering bad news. In an Opryland ballroom with 45 executives, Potter reminded them that mail volume bounced back after the Sept. 11 terrorist attacks and the anthrax scare in 2001.

"Given the behavior that's going on in the marketplace," Potter told the executives, "we don't expect that to happen this time."

Several told Potter that cutting Saturday service could make their weekend deliveries impossible. "If we all get the bunker mentality, we're going to be dealing with this problem for the next decade," Potter told them, insisting that a six-day delivery cannot be sustained.

Moments later, he was down the hall urging postal workers to look out for the next big thing for the mail service.

"It wasn't somebody in engineering who thought of Netflix," he said. "It was somebody that thought they could take a DVD and put it in the mail. wasn't a thought of someone in the Postal Service."

The next day, Potter and his team touted new ads for Wal-Mart's mail-order pharmacy that feature the Postal Service. Disney will air ads soon for the new "Toy Story 3" movie that incorporate the Postal Service. And Hallmark plans to sell greeting cards that include envelopes with prepaid postage. All are deals designed to boost business and remind Americans that the Postal Service still matters.

'Very tough year'

Potter knows he's asking Congress to tackle "a very difficult issue in a very tough year," and he conceded that lawmakers will probably adopt small changes over time instead of the massive overhaul he wants all at once.

Sen. Thomas R. Carper (D-Del.) said Congress needs to give Potter flexibility. In the Post poll in March, 71 percent of Americans said they support cutting Saturday deliveries. Carper mentioned those numbers during a recent Senate Democratic Caucus luncheon. "I think that some just need to be better informed," he said.

But others are unconvinced.

Sen. Susan Collins (R-Maine) worries that Potter hasn't done enough.

"It seems that every three years the Postal Service comes to us asking for financial relief in return for future profitability. We seem to give the relief and don't seem to get the profitability," she said.

Potter expects that unions will make concessions during negotiations this year, but William Burrus, president of the American Postal Workers Union, warned otherwise.

"I'm not going to make any concessions," Burrus said. "He's trying to deny services to the American public through the service reductions. All of this is designed to accelerate significant savings and become a delivery arm of major mailers."

Another skeptic is the Postal Regulatory Commission's chairman, Ruth Y. Goldway. Her panel doesn't plan to issue its nonbinding opinion until at least October, complicating Potter's preferred timeline. Goldway is not shy about voicing her fears that Potter is chipping away at the Postal Service's unique place in American society.

"His plan to move post offices into Wal-Mart is not my idea of an adequate replacement," she said. "He hasn't put a penny into modernizing, renovating or creating new and attractive post offices."

The PMG is unmoved by his critics.

"Everything that we have in the plan I'm convinced has to happen over the course of time to get the Postal Service on firm financial footing and to keep us there," he said.

As for Goldway's concerns: "If somebody wants us to operate like a museum, then fork over the money and we'll be happy to do so."

Promoted from within

Born in the Bronx, Potter attended Cardinal Spellman High School (a year behind Supreme Court Justice Sonia Sotomayor, whom he never knew) and received an economics degree from Fordham University. He followed his father into the Postal Service, assuming that the work would lead him elsewhere.

He went from a part-time graveyard shift in Westchester County, N.Y., to the regional office in Manhattan, where his father, Richard, worked and where Potter met his wife, Maureen. Potter later moved to Washington, where he became postmaster general in June 2001. He had been on the job for four months when the anthrax attacks crisis struck and killed five people, including two D.C. postal workers, thrusting him onto the national stage.

The 71st successor to Benjamin Franklin, Potter is the longest-serving postal boss since the 1820s and only the sixth postal worker promoted from within. He rarely socializes in Washington, preferring to head to his Potomac home after a 10-hour workday. He has a son in college and a daughter who is a high school senior. He'd rather be remembered as the postmaster who saved the mail service than the one who watch it challenged by e-mail.

If things go his way, Saturday deliveries would end next spring, he told customers in Nashville.

"The value of going to four days -- removing a second day -- is even greater," he said. Although no such plans exist, Potter said that Tuesdays are the second-slowest day of the week.

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