GAO: Postal Service faces tough times

Dec 01, 1999 10:30 PM  By

It’s official: In a report issued in late October, the U.S. General Accounting Office (GAO) states that if the U.S. Postal Service doesn’t find new sources of revenue over the next few years to offset the impact of e-mail on first class “snail” mail, the agency will run into serious operating difficulties. While the GAO report doesn’t project the exact toll that e-mail will take, it expects first class postal volume and revenue to decline beginning in 2003. “The USPS may be nearing the end of an era,” GAO government business operations issues director Bernard Ungar said before the House postal subcommittee in late October. The GAO report is based on a data quality study that it launched in 1997 with the Postal Service and the Postal Rate Commission.

In his testimony before the House postal subcommittee, Rep. John McHugh (R-NY) predicted that the USPS could lose some $17 billion in first class mail revenue over the next few years – a figure the USPS does not dispute. McHugh continues to push his postal modernization bill, H.R. 22, introduced four years ago (and since modified). The bill would give the USPS greater flexibility in setting rates to allow it to better compete with the likes of United Parcel Service and Federal Express. But H.R. 22 has run into resistance from assorted parties – including the two private carriers – and from Congress, which doesn’t see the need to revamp an agency that has posted a surplus for the past four years.