WASHINGTON, D.C. – U.S. Senator Susan Collins expressed concern Thursday about a plan to reduce postal service delivery from six days to five days per week in order to cut U.S. Postal Service expenses.
Senator Collins, who is Ranking Member of the Senate Appropriations Subcommittee on Financial Services and General Government, told Postmaster General John Potter that the Postal Service should focus first on expanding customer services and developing new revenue streams rather than cutting services in order to reduce its red ink.
She pointed out that cutting a delivery day will have an immediate impact on a wide array of customers – affecting individuals and businesses, varying from weekly newspapers to Netflix, a DVD rental company with a distribution facility in South Portland that depends on mail delivery. That kind of impact could actually lead to further erosion in the number of Postal Service customers and a deeper loss of business, she said.
Any plan to reduce delivery service from six days to five would require the Postal Service to make a very compelling case, she said. It would need to prove that “reduced delivery will not further decrease volume, setting off a death spiral. It will take all members of the postal community, including Postal Service employees and management, members of the mailing community, Congress, and the Administration to contribute to the solution to this financial crisis.”
The Postal Service “is one of our oldest institutions and is the linchpin of a $900 billion mailing industry that employs close to nine million people in businesses as diverse as paper manufacturing, printing, catalog companies, publishing, newspapers and financial services,” Senator Collins added.
In recent years, the Postal Service has been hit by declining mail volumes, the recession and loss of customers who are using digital technologies such as e-mail to replace traditional mail. It has projected that it could lose up to $238 billion over the next 10 years. In response, the Postal Service has requested that Congress allow a reduction of its mail delivery schedule and approve the elimination of its requirement to prefund its future retiree health benefits.
At the hearing, Postmaster General Potter said the Postal Service expects to post a net loss of approximately $7 billion in fiscal year 2010.
“I am experiencing a sense of déjà vu in attending today’s hearing on this topic,” Senator Collins said, noting that the Senate Homeland Security and Governmental Affairs Committee, where she is Ranking Member, has held 14 hearings related to the financial crises at the Postal Service since 2003.
Approximately every three years – in 2003, 2006 and 2009, the Postal Service has come to Congress, “seeking relief from its financial obligations in exchange for promises of future profitability,” Senator Collins said. “The Postmaster General’s request to Congress for relief from its retiree health benefits payments and from its obligation to deliver mail six days a week is just the most recent in a long history of Postal Service requests for financial assistance in exchange for the promise of becoming financially solvent — some day.
“But time and time again, I have been disappointed in the results,” she said.
Senator Collins said her fear is that if further adjustments are made, the Postal Service will return to Congress in another three years, pleading the same case. “I just don’t want to see this movie again,” she said.
In addition to Postmaster General Potter, other witnesses were Ruth Y. Goldway, Chairman of the Postal Regulatory Commission; David C. Williams, Inspector General for the U.S. Postal Service; and Phillip Herr, a director in the Physical Infrastructure team at the Government Accountability Office.