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Potter Talks Reform, Closings With Senate Panel

Postmaster general John E. Potter detailed measures the U.S. Postal Service has undertaken to control costs as well as future plans at a Senate subcommittee on international security, proliferation and federal services hearing Friday.

Potter told the senators that the agency has reduced officers by 20 percent, eliminated 800 headquarters positions, cut 20 percent of area offices and reduced administrative staff by 10 percent in the past year. It saved $2.9 billion, he said, by reducing work hours by more than 77 million and reducing career employees through attrition by more than 23,000.

“Our total complement today is similar to what it was in 1995,” he said. “Since then, mail volume has risen 21 billion pieces and our delivery network has added 12 million new addresses.”

Looking to fiscal year 2003, Potter continued to predict a positive net income and again said that there would be no rate increase until 2004. The agency will reduce its debt by almost $1 billion at the end of FY 2003, he said.

Several senators asked about the agency's Network Integration and Alignment program, which is considering the closure of some of the 300 USPS processing facilities across the country. Potter said the NIA is still being worked on, though the postal service does plan to close processing facilities in 2003 but not lay off any workers.

Several senators asked about Potter's views on a presidential commission on postal reform. Sen. Susan Collins, R-ME, who introduced a bill in August calling for one, asked Potter whether he supported such a commission.

“There is a need for change, and whatever vehicle that gets us there is the vehicle that I am going to support,” he said.

If a commission were formed, Potter said, he would want it made up of businesspeople “that can bring business acumen to the table.”

Collins said she recently met with 20 businesses in Maine, including printers, small catalog companies and L.L. Bean. “All of them have expressed great concern to me about more predictability in catalog rates,” she said. One cataloger, she said, told her that the cost to mail its book “greatly exceeds the paper used to print the catalog.”

One solution to such uncertainty regarding postal costs, Potter said, is phased rates, which would provide more frequent but smaller rate increases that mailers could plan against. “It helps customers plan their budgets several years out, and it helps us in terms of efficiencies,” he said. “We wouldn't have to deal with peaks and valleys in our mail volumes.”

Sen. Tom Carper, D-DE, who has said he plans to introduce postal reform legislation early next year, asked whether the postal service's capital freeze had affected service and getting mail delivered on time. Potter said it had not hurt performance because volume has been down due to the economy, last year's terrorist and anthrax attacks and a weak advertising industry.

When asked about negotiated service agreements, Potter said these would raise First-Class mail volume. The postal service sent the Postal Rate Commission its first request for an NSA with Capital One this month.

Carper asked about the postal service's use of Amtrak to haul mail, especially since the House Appropriations Committee defeated an effort Thursday to give Amtrak the $1.2 billion it said it needed next year and pushed through an amendment that threatens long-distance trains.

Potter said that the USPS uses Amtrak on the East Coast and in Chicago to move mail but that “we are evaluating all of our networks and we are finding that there are some redundancies.” He also said that he has “a major concern about the future of Amtrak,” but that the USPS has a contingency plan if service is disrupted.

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