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Postmaster General Urges Congress to Provide Delivery Schedule Flexibility

April 17, 2013

WASHINGTON, DC—April 17, 2013—Postmaster General Patrick R. Donahoe told a House committee that the Postal Service is currently operating with a broken business model and the gap between revenues and costs will only get worse in the coming years unless the laws that govern the Postal Service are changed.

“Our financial problems are due to the restrictive laws that prevent us from fully responding to changes in consumer behavior,” Donahoe testified before the House Oversight and Government Reform Committee. “Any private sector company could quickly adapt to the market changes we have experienced, and remain profitable. However, we do not have all of the flexibility we need to adapt to a changing marketplace.”

Donahoe said the Postal Service continues to be very aggressive in cost-cutting actions it can take within the law, reducing its cost base by $15 billion since 2006. “No other organization, public or private, that I am aware of, can claim a similar cost reduction while continuing to function at a high level. And yet, we have to go much further and much faster and we are prepared to do so.”

The Postal Service would have reduced costs an additional $2 billion annually by implementing the new delivery schedule announced in February. However, according to Postal Service legal opinions, House Resolution 933 to fund government operations for the remainder of the fiscal year included language specifically designed to prevent the Postal Service from changing to the new delivery schedule.

“The Postal Service is a responsible, law-abiding arm of the executive branch,” Donahoe told the Committee. “Congress passed a law, we reviewed it carefully, we complied with it and we informed our customers—which is what we did last week. Our customers require certainty, especially about something as fundamental as our delivery schedule. And so, we announced that we would delay implementation of our new schedule until we gained legislation giving us the ability to move forward.”

The Postmaster General urged Congress to include delivery flexibility as part of comprehensive postal reform legislation to help return the Postal Service to long-term financial stability and avoid the risk of becoming a significant burden to the American taxpayer. He also urged passage of other legislative provisions that would provide for the following:

  • The ability to develop and price products quickly.
  • The ability to control healthcare and retirement costs.
  • The ability to switch to a defined contribution retirement system for new employees.
  • The ability to quickly realign mail processing, delivery and retail networks.
  • A more streamlined governance model.
  • More flexibility in the way the Postal Service leverages its workforce.   

The following is the Postmaster General’s oral testimony before the committee. Please note that the remarks as delivered may vary from the prepared text. The full written testimony is available at: http://about.usps.com/news/testimony-speeches/welcome.htm.

 

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