Live from the Government Affairs Conference: PMG Potter on fixing the USPS

(Direct Newsline) Washington–The ailing U.S. Postal Service has to be fixed–and fast. So says the man who runs it: Postmaster General Jack Potter.

“We need to change today,” said Potter, speaking on May 1 at the Direct Marketing Association’s 2002 Government Affairs Conference here.

Potter championed running the USPS as a Commercial Government Enterprise (CGE), a government-owned entity but one that enjoys some of the operational and financial flexibility found in the private sector.

The model would allow the USPS to retain universal service while giving it pricing and labor flexibility and enabling it to retain earnings and work under private-sector labor law. This model that would also allow the Postal Service to compete in today’s competitive marketplace, Potter said.

The Postal Service introduced it long-awaited transformation plan in March. Designed to fix a system bogged down by legislation enacted more than three decades ago, the plan outlined three models of what the USPS might look like in the future: a privatized operation; a more traditional government agency; and a commercial government agency.

The final version of the plan was submitted to Congress and the Government Accounting Office on April 4, after an extensive comment period. Congress will schedule hearings later this spring to review the plan.

Under the CGE plan, a new flexible pricing model with smaller more regular increases could be implemented much more quickly than the long rate process currently in place, an issue at the top of Potter’s list. He is working with the Postal Rate Commission to look at rate procedures.

The CGE model would require a structural transformation and legislation by Congress. Potter acknowledged that fundamental changes are needed to the laws governing the USPS. For example, legislation currently prohibits the Postal Service from closing post offices.

“It’s time that we, in a very real way, take a look at legislation to see what’s preventing the Postal Service from completing its mission to provide universal service at an affordable rate,” Potter said. “Can we do it? We don’t have a choice because we’re pricing ourselves right out of the market.”

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