The year is 1990 and the setting is a small town in Kansas.
Inside the local post office, a computer-linked electronic terminal is activated. There's an incoming message from Boston and a postal worker gets a printout, which is sealed in an envelope and handed to a letter carrier for special delivery. Within an hour, a local resident has complete details of a complex business deal.
Is it possible that this is the U.S. Postal Service of tomorrow?
Some people say that new technology of electronic transfer either will become part of the postal business and thus its salvation, or that electronic transfers will be ignored and the nation will be left with an expensive and outdated postal system that serves fewer and fewer people at constantly escalating deficits.
Although there may be choices other than the either/or scenario outlined above, the decision on what kind of postal service is wanted probably will be made this year. And the American people are being given an unprecendented opportunity to take part in the planning.
Starting in eight cities last week and continuing for the next two weeks in about a dozen other cities, public hearings are being held on post office problems and suggestions for the future. Hearings will be held for the next five days in Washington, and on Jan. 31 in Charleston, W. Va., among other locations.
The Commission on Postal Service is conducting the hearings as part of its mandate from Congress last year to report by March 15 on recommendations for the future.
Although the semi-independent U.S. Postal Service corporation was established to replace the old Post Office Department less than six years ago, after another commission's study, Congress ordered the new report in the wake of soaring losses and gloomy forecasts about declining mail volume.
Congress also authorized an additional $1 billion of subsidy to the Postal Service to help cover previous dets! Half of that amount went into the postal treasury during the July-September quarter and the balance is due in the current fiscal year.
Altough the Postal Service was able to report a surplus of $15 million in the quarter ended Sept. 30, and may have another surplus for the final quarter of 1976 (due to added business when United Parcel Service was struck in the Northeast), the long-term outlook is for rising losses.
In his budget message to Congress last week, former President Ford predicted a postal deficit of nearly $1 billion in the current fiscal year ending Sept. 30. Ford predicted a loss of $1.7 billion the following year, which he said would force an increase in rates.
With that prediction coming on the heels of a federal court decision that has cast doubt on the current rate structure, and which is being appealed by the Postal Service, prospects disturb even postal officials.
"It is incontestable that rates have moved up higher than expected since postal reorganization. But the increases took place in a period of surging inflation that dramatically boosted the costs of running a nationwide service organization that employs one of the nation's largest work forces and provides a level of personal service, such as door-to-door delivery six days a week, that is unique in this country today," Postmaster General Benjamin F. Bailar said in his organization's recent annual report.
Cost-cutting won't by itself produce an economically sound postal service, and there is little doubt that future viability of the post offices will be "closely tied" to new technologies, Bailard added.
The key problem is money to finance wages for 680,000 postal workers and the far-flung network of small and large mail facilities. Overall expenses in fiscal 1976 rose by 10.7 per cent to $14 billion. Revenues from postal rates totaled only $10.2 billion. Federal tax-payers contributed $920 million of "public service" money to subsidize money-losing operations such as rural mail and $724.5 million to subsidize reduced mail rates.
Still, the Postal Service ended up with a deficit of $1.18 billion for the 12-month period. In the five fiscal years 1972-1976, the Postal Service had losses of about $2.8 billion and that doesn't count nearly $8 billion of federal subsidies counted as part of revenues.
More alarming than actual losses, however, are warnings about what may happen.
A major element in Postal Service operations is called "transaction mail," a big-money-maker that covers many overhead cost and helps to subsidize loss operations. This catergory of mail includes bills and payments for businesses and residences. It is an endangered species.
A Postal Service staff study said direct deposit of Social Security payments and paychecks in banks or thrift institutions, automatic payment of mortgages and insurance, and electronic transfers of funds from an individual's checking account to that of a company in bill payment add up to smaller mail volume. Higher rates could induce even more use of such technology, the staff reported.
Large mailers also are trying out personal delivery systems, less frequent billing and consolidated first-class mail. In addition, people are writing fewer letters each year as the telephone continues to supplant personal correspondence.
These are the projections that led to establishment of still another commission. A sense of urgency was evident in the relatively short period provided for a final report. The 1976 postal aid act was signed by Ford on Sept. 24, giving the new commission about six months to reach its conclusions.
In an interview, commission executive director David Minton said he expects the March 15 deadline to be met.
The main task of the commission, Minton said, will be educating the American people about the choices they must make in term of future service.
"If you ask the average American if he wants to give up a sixth day of mail delivery, most will say 'no.' But if you phrase the question differently, and ask if he wants six-day delivery or a 15-cent stamp, you'll get a different answer," Minton stated.
A veteran congressional postal staff member, Minton said bluntly: "The future of the U.S. Postal Service doesn't look favorable at all, giving rising costs, electronic transfer and the seemingly unsolvable problem of [postal workers'] productivity, which doesn't go up as fast as costs."
At the same time, it would be a "highhanded remark" to suggest drastic cuts in the postal work force, Minton said. "Postal jobs are good, solid middle-class jobs with good pay and retirement . . . what are you going to do with these citizens?" Minton asked.
"If people want the service they are getting, which is pretty good by and large, it will cost a lot more money, either subsidies or higher rates," with an annual deficit by 1982 of $5 billion possible, he added.
"The mail business has peaked with good commercial parcel business going to United Parcel Service and third-class mail going to inserts in newspapers, such as that recent Bloomingdale's booklet in The Washington Post," Minton said.
A major decision by the commission will be whether to recommend a role for the Postal Service in electronic transfers, which would be costly to establish. It would be a radical departure and would require extensive training programs, the commission director noted.
But there is no "very rapid way to deliver hard copy of anything in the U.S. today, except for businesses" becaus ecombined Postal Serivce-Western Union "mailgrams" are delivered a day later and Western Union telegrams are not delivered instantly any more.
President Carter, who spoke out in favor of a better postal system during last year's campaign, will have a lot of influence on what happens next. Insiders expect him to wait for the commission's report before taking any action. Because Carter is not connected with the joint White House-congressional effort tht set up the commission, he easily could dismiss any proposals and go his own way.
As outlined by the Postal Service itself, there appear to be three choices:
Continue current policy, letting postal rates float higher to cover some of growing costs. Under this scenario, first-class rates could rise to 22 cents in 1981 from 13 cents today. Total mail volume would dip slightly but the "mix" will be less favorable, with more subsidized classes of mail and less profitable first-class mail.
Operation as a true "public service," heavily subsidized by the taxpapers. Under this plan, the Postal Service would give everyone door delivery service, add residential collection boxes and pick up mail more frequently, keep all postal facilities open and keep prices down. Such an operation could cost a cumulative subsidy of $22 billion by 1981.
Transformation into a real business enterprise, tailoring services to meet demands. Under this proposal, the Postal Service probably would overhaul the current delivery system (alternate-day delivery to residences), eliminate many post offices and revise pricing to encourage mail use. This "Postal Service, Inc.," would have no deficits.
One other alternative was proposed last week by the Justice Department's antitrust division, which suggested that the postal problem is tied closely with its monopoly status in first-class mail. Noting that first class rates jumped 117 per cent in the past six years (well over twice the rate of inflation), the division said over 50 per cent of costs are incurred in running 75 major urban post offices serving metropolitan areas.
Business mail accounts for 80 per cent of postal costs while the share of federal tax revenues paid by business is about 20 per cent, indicating that some businesses are subsidizing other business mail costs, the division concluded. What is needed, the Justice study said, is a full investigation into the possibility of permitting competition for first-class delivery. There is no evidence that the public would be worse off or postal deficits higher in a competitive environment, the department stated.