House Committee Grills Henderson, USPS

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WASHINGTON -- Postmaster general William J. Henderson answered many tough questions from the House Committee on Government Reform yesterday and offered more bad news for direct marketers.

Committee members -- including chairman Dan Burton, R-IN, Rep. Danny Davis, D-IL, and Rep. Bob Barr, R-GA -- asked Henderson whether a rate increase of 10 percent to 15 percent could be avoided next year, whether cutting back on Saturday delivery is a possibility and why the U.S. Postal Service is predicting a $2 billion to $3 billion loss this fiscal year.

Henderson, who appeared nervous, basically delivered more bad news.

When Burton asked whether there was any way the agency could postpone the rate case for the benefit of small businesses that could be forced to fold, Henderson said he has asked deputy postmaster general John Nolan to find ways to avoid a high rate increase. "But we are in a vise right now and we are seeing declining volumes, so that's a problem," he said.

He also said the USPS is launching an internal study "to see how much Saturday delivery costs us." Lawmakers didn't seem pleased with the notion.

Henderson said he understood that many groups would be hurt by eliminating Saturday delivery, especially newspaper mailers, who rely on Saturday delivery, and remittance mailers, who believe that people receiving bills on Saturday are more likely to pay them that day than other days of the week.

As for why the USPS is facing a loss of $2 billion to $3 billion next year, and maybe more, Henderson said the agency is a victim of the slowing economy, declining demand and a lack of postal reform.

Speaking passionately about reform, he said, "The biggest disappointment I experienced during my time as postmaster general was that we didn't get postal reform passed."

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