Will The “Pot”-ter Boil Over?

Welcome Back Potter?

United States Postmaster General John E. Potter will be back on the hot seat Wednesday on Capitol Hill. Embroiled in a fiscal mess inside the U.S. Postal Service, Potter asked Congress in January to cut mail delivery from six days to five days a week. Now, after requesting that major cost-saving measure, Congress plans to question Potter about his own salary package.

According to postalnews.com, U.S. Rep. Stephen Lynch (D-Mass.) – chairman of the House Oversight and Government Reform Federal Workforce, Postal Service and the District of Columbia Subcommittee – promised to grill Potter because “the huge increase in pay for Mr. Potter is incongruent with the post office’s recent performance.”

The USPS Board of Governors board boosted Potter’s salary from $186,600 to $258,840 for fiscal 2007, but with deferred compensation and performance incentive pay his compensation came to more than $850,000 that year and remained the same for fiscal 2008. The pay increases for Potter and other top postal executives are a result of a 2006 Postal Reorganization Act approved by Congress that allowed increases in salary for top officers.

The USPS has not received an operational subsidy from Congress since 1982, and Potter predicts the federal agency will lose $6 billion in fiscal 2009. That would be on top of losses of $2.8 billion in fiscal 2008 and $5.1 billion in fiscal 2007. The USPS last turned a profit of $900 million in fiscal 2006.

Potter’s $857,459 package, according to postalnews.com, includes base compensation for fiscal 2008 listed at $263,575, according to Postal Regulatory Commission records with a $135,041 performance incentive bonus, deferred until he leaves office. His other compensation includes $77,347 in perks, including parking, life insurance premiums, airline clubs, spousal travel and security, plus his $381,496 pension.

Also deferred until he leaves office is accrued annual leave totaling more than $245,000, as of September 2008, which he will receive in a lump sum. He has been in office since June 2001.

BOG Chairman Carolyn Gallagher and PRC Chairman Dan Blair are also scheduled to appear before the subcommittee on Wednesday to explain the pay structure.

Potter told the Senate Homeland Security and Governmental Affairs Federal Financial Management Subcommittee in January the financial situation of the mail service is “grave.” Reducing mail delivery by one day per week requires congressional approval to delete a rider on appropriations bills requiring six-day mail service.

Rising costs and falling mail volume were the main reasons for Potter’s request for five-day-a-week mail delivery. If Congress and postal officials approve the proposal, they could eliminate mail delivery on either Tuesdays or Saturdays, the system’s slowest days.

Potter also requested that Congress alter the USPS’s payment schedule for funding retiree health benefits to help it cut costs. (The Postal Service is required by law to prefund health care benefits for all its retirees.)

Thanks to the increase in e-mail use, as well as the general economic slowdown, USPS said mail volume dropped by 4.5%, or more than 9 billion items, in 2008, to about 202 billion pieces.

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