Washington–Postmaster General John Potter told a Senate subcommittee last week that the U.S. Postal Service expects to end the new fiscal year, which just began, with a $1.35 billion loss, its third in as many years.
According to preliminary figures released earlier in the month by CFO and executive vice president Richard Strasser, the USPS ended fiscal 2001 $1.6 billion in the red.
After four consecutive years of surpluses totaling nearly $6 billion, the USPS ended fiscal 1999 with a $199 million loss.
“The numbers are extremely sobering,” Potter said while testifying before the federal services subcommittee of the Senate’s Government Affairs Committee.
“The simple fact is that, during the last fiscal year, costs have risen almost twice as fast as revenue and our options are very limited as to how we will continue to pay the costs of maintaining the nation’s expanding universal service network,” he said.
While Potter said that the USPS has moved “aggressively” to cut costs, saving more than $1.3 billion in the last fiscal year alone, he noted that the USPS is approaching the limit on how much money it can borrow from the U.S. Treasury.
Noting that “recent economic reports have give us [the USPS] cause for concern about future mail volume and revenue projections, Potter said the USPS “cannot borrow its way to prosperity” and “placing further financial burdens on postal ratepayers” is not a solution.
Stressing that postal officials are doing all they can to cut costs like re-evaluating unprofitable ventures, combining and eliminating jobs, including some management positions the PMG said the USPS will not abandon its foray into electronic commerce, but wants the government to prepay the $957 million it owes the USPS.
Congress pledged the money in 1993 when it passed the Revenue Forgone Reform Act, agreeing to 42 years worth of payments to make up for systematic yearly reductions in reimbursements for free and reduced-rate mail.
While echoing the cries of his predecessors, William J. Henderson and Marvin T. Runyon, Potter called for the passage of postal reform legislation. “We must acknowledge that an antiquated legislative charter severely limits our organization’s ability to respond quickly to market changes, placing extreme pressures on our bottom line,” he said.
The PMG also told the panel that he and postal officials have adopted a three-point program for the future that includes identifying any immediate legal steps the USPS can take to further slash its costs; to work closely with Congress in identifying “moderate” legislative steps that can be taken to aid the USPs and determining what long-term steps that might be considered in overhaul the USPS.