Amid the headlines about Iraq and North Korea, reports of the newly formed presidential commission to overhaul the U.S. Postal Service may have been buried. But for catalogers and other commercial mailers, the Dec. 11 announcement was big news indeed. In fact, the commission will likely lead to the first reorganization of the nation’s postal system since 1971.
The commission’s primary intent is to reform the USPS so that it can continue providing universal delivery service at reasonable rates. Its report and recommendations are due July 31.
“The time had come for the Postal Service to be studied, so the formation of a commission is sensible,” says George Mosher, president/CEO of National Business Furniture, a $123 million cataloger based in Milwaukee. “Obviously, the world has changed dramatically, so the commission has to figure out what the Postal Service should get into, what it should not be in, and its future role.”
U.S. Treasury undersecretary for domestic finance Peter Fisher has already said that though the Bush administration is open to ideas, the goal isn’t to privatize the USPS. That leads Gene Del Polito, president of the Association for Postal Commerce, to warn mailers not to hope for too much.
The commission “is not going to make revolutionary recommendations, because the Bush administration said it doesn’t want to privatize the Postal Service,” Del Polito says. “So I don’t expect the commission to take a radical path, just a very conservative one that preserves the Postal Service as a federal institution but trims its sails and defines its appropriate and inappropriate areas.”
Del Polito expects parcel delivery to be among the hottest issues, because the USPS is under constant pressure from private-sector rivals such as United Parcel Service. And the commission may look at curtailing delivery as well, since Fisher says the administration is open to cutting back mail delivery from six days a week to five.
In addition to postal reform, Direct Marketing Association president/CEO Bob Wientzen says that he hopes the commission will seek to enact legislation that will update the current formula for funding retirement benefits. In November it was revealed that the USPS had overestimated what it needed to pay into its retirement fund; as a result, it may now have enough “found” money to avoid raising postal rates for the next four years. But the USPS won’t have these “extra” funds to spend unless Congress passes a bill revamping the retirement funding process.
Cochairing the commission are Harry Pearce, a Republican who is chairman of Hughes Electronics Corp., and James Johnson, a Democrat who is chairman of the Brookings Institution. Other panel members are Dionel Aviles, president of Aviles Engineering Corp.; Don V. Cogman, chairman of CC Investments; Carolyn A. Gallagher, former president/CEO of Texwood Furniture; Richard Levin, president of Yale University; and Norman Seabrook, president of the Correction Officers’ Benevolent Association.