Postmaster General Urges Congress to Fix Business Model to Close $20B Gap

WASHINGTON, DC—July 17, 2013—Postmaster General Patrick R. Donahoe told a House committee yesterday the Postal Service continues to face systemic financial challenges because it has a business model that does not allow it to adapt to changes in the marketplace and it does not have the legal authority to make the fundamental changes that are necessary to achieve long-term financial stability.

“We cannot pretend these marketplace changes aren’t happening or that they don’t require us to make fundamental changes to our business model,” Donahoe testified before the House Oversight and Government Reform Committee. “We need comprehensive reform now.”

Donahoe said the Postal Service is moving quickly down a road that leads straight to a large financial chasm and postal reform legislation can be the bridge over that chasm. “If we build the bridge properly, the Postal Service can have a bright future,” he said. “It can adapt and better serve the changing mailing and shipping needs of American industry and the American public. It can be a more powerful engine for economic growth and it can be profitable and operate without burdening the American taxpayer.”

Donahoe added: “We need a bridge that gets us all the way to the other side. Half measures are about as useful as half a bridge. We need legislation that, together with our planned changes, confidently enables at least $20 billion in savings by 2016. If not, we go over the edge.”

The Postal Service Five-Year Business Plan provides a roadmap to restore financial stability and preserve affordable mail service for the American public. Much of the savings cannot be achieved without legislative action.

“There is a simple question to ask about the legislation this committee is in the process of developing,” Donahoe testified. “Does it enable $20 billion in savings by 2016? We believe our plan meets this test and provides the most responsible approach for our customers and employees, but we cannot implement it without legislation.”