USPS Adviser: Postal Service Can't Compete Without Rate Hikes

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WASHINGTON -- Rising costs and falling income have the U.S. Postal Service on its heels, Larry Speakes, senior adviser to the U.S. postmaster general, told nonprofit executives yesterday at the 11th annual Direct Marketing Association Nonprofit Washington Conference.

"We have a costly infrastructure that doesn't pay its own way, and we don't have the flexibility to change it," said Speakes, who was press secretary during the Reagan administration.

Congressional over-regulation, he said, has left the postal service incapable of dealing with increasing competition from the private sector.

He told conference attendees that the postal service's already announced plans to submit a rate case should happen this summer.

The postal service has cut 700 jobs at headquarters and a similar number in the field, he said, and has cut spending by one-third. It also is reviewing projects and programs and is cutting nonessential funding. But the service still will be "$2 billion-plus in the hole next year," he said. "It's an uphill battle to keep our financial heads above water."

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