Usps Business Plan Needs A Major Overhaul “Tinkering Will Not Be Sufficient,” Gao Says

WASHINGTON – Four leading members of the Governmental Affairs Committee, responding to a new analysis of the United States Postal Service?s financial problems, urged the Service to present a workable blueprint to lift itself out of its cycle of debt.

                Chairman Joe Lieberman, D-Conn., Ranking Republican Fred Thompson, R-Tenn., along with Senators Daniel Akaka, D-Hi., and Thad Cochran, R-Miss., reacted to a General Accounting Office study that called the Postal Service?s business model ?unsustainable.?

                In April 2001, GAO placed the Postal Service on its list of government agencies most at risk of serious financial mismanagement.  In May, the Committee adopted GAO?s recommendation that the Postal Service submit a ?transformation plan? that will enable it to continue providing universal mail delivery and reasonable postal rates.  That plan is due to be delivered to the Committee in early April.

                Lieberman said:  ?We all know the Postal Service has a lot of problems, including deficits, cash-flow pressures, rising debt, and liabilities.  Given this situation, the Service?s ?transformation plan? has to be a serious blueprint for future solvency – in other words, a complete overhaul of its financial operations.  The Postal Service is a key part of our national infrastructure so we must continue to work with the Service, unions, and the general mailing community until USPS?s financial house is in order.?

                Thompson said: ?The Postal Service framework established by Congress in 1970 appears to be near a breaking point.  We established a system whereby the Postal Service would have

the characteristics of both a federal agency and a business,” Thompson said. ?”This system worked for years, but circumstances have changed.  The Service’s ‘transformation plan’ provides a unique opportunity for change.  Capitalizing on the comments of all interested parties, we look to the Service to produce a plan that will begin to restore its position to one of economic stability.?

                Akaka said: ?This report underscores the urgent need to address what GAO calls the Postal Service?s ?unsustainable business model.?  Evolving technology and the recent terrorist attacks have changed the way that information is delivered.  Even before September 11th, the Postal Service was experiencing a decline in volume, which has had a significant impact on revenue.  As chairman of the Senate Subcommittee on International Security, Proliferation, and Federal Services, I look forward to comparing this GAO report with the Postal Service?s transformation plan requested by this Committee.?

                Cochran said: ?This report will be helpful to us as we exercise our oversight responsibilities.  It is essential that we continue to have the benefit of dependable and affordable services from the U. S. Postal Service.?   

                The Postal Service has projected a $1.35 billion loss for 2002.  That projection was made before the anthrax-through-the-mail scare last fall, which imposed enormous, new expenses on the Service.

                 ?USPS?s financial outlook is becoming increasingly dire,? the GAO reports.  ?Tinkering with the existing system will be insufficient to produce a comprehensive transformation that will enable USPS to fulfill its mission in the 21st century.?
                The Senators requested GAO in March 2001 to study the cause of the Postal Service?s financial disarray and to offer options the Service might take to improve its situation. One of the recommendations was for the Postal Service to adopt the ?transformation plan?due next month.