Presidential Commission
A New Postal Era
This year marks a new chapter in the history of the
United States Postal Service. A presidential commission is
already at work studying ways to ensure the long-term
viability of postal service in the United States. The nine-
member panel has an "historic opportunity to offer recommendations guaranteeing a postal system as effective and
dependable as today's - for many years to come," says
Postmaster General Jack Potter. The Postal Service is the
foundation of a $900 billion industry that employs 9 million
people. "The nation cannot afford a postal crisis. Mail is
simply too important to the life of our nation," says Potter.
The President's Commission on the United States Postal
Service will submit its report to the president by July 31,
2003.
This kit includes the presidential document establishing
this commission, the Department of the Treasury statement, biographies of presidential commission members, remarks by the postmaster general, procedures for the
establishment of subcommittees, and procedures for the
public comment process.
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Dionel E. Avilés
Dionel E. Avilés of Houston received his bachelor of science degree from Texas A&M University in 1954, his master of engineering degree from A & &M in 1961 and his
doctorate in Philosophy from A&M in 1966. He is a Registered Professional Engineer in the state of Texas, New
Mexico and the Commonwealth of Puerto Rico.
Dr. Avilés is the owner and president of Avilés Engineering Corporation, a geotechnical and environmental engineering, construction materials testing and inspection site
assessment services firm he founded in 1981. He is a graduate of the Army War College in Carlyle, Penn., and after a
distinguished military career, he retired from the U.S. Army
Reserve in 1993 with the rank of Major General.
Dr. Avilés has more than 47 years of engineering experience with a primary focus on the Gulf Coast Region. His
professional engineering experience includes service in the
U.S. Army Corps of Engineers, where he conducted airfield
pavement evaluations. He has national and international
airfield experience in pavement evaluation and runway design. Dr. Avilés has served in positions of leadership in professional engineering societies and is a Fellow on the
Society of American Military Engineers. He has authored
and presented numerous technical papers on geotechnical
engineering.
Dr. Avilés serves on the boards of many civic organizations including director of Camp For All Foundation, President of Coastal Water Authority, Greater Houston
Partnership Board of Directors and Houston Community
College System Foundation Board of Directors.
Dr. Avilés is a member of the University Associates Program and Texas A&M. He is one of the founders of the Civil
Engineering Endowment Fund and has underwritten a 12th
Man Foundation Scholarship and a Sul Ross Scholarship.
Dr. Avilés was appointed to the Board of Regents by
Governor George W. Bush in 1997. He serves as Vice-
Chairman of the Board and as Chairman on the Committee
on Buildings and Physical Plant and a member of the Committee on Audit, Committee on Health Affairs, Committee
on Educational Access, Policy Review Committee and the
Public Policy and Planning Committee. Dr. Avilés is the
Board's special liaison to the Texas A&M Research
Foundation, the Texas Growth Fund Board and the Texas
Higher Education Coordinating Board. His term expires
February 1, 2003.
Don V. Cogman
Currently Chairman of CC Investments, a private investment firm in Scottsdale, Arizona, Mr. Cogman is a former
communications, public affairs and advertising executive,
working in New York and Washington for thirty years. Additionally, he currently serves as Chairman of two non-profit
foundation boards.
Mr. Cogman is the former President and Chief Operating
Officer World-wide of Burson-Marsteller, a New York based
international marketing communications and public relations firm. He also served as Executive Vice-President of
Young & Rubicam, a global advertising company in New
York. Prior to his New York experience, he spent nearly
twenty years in Washington D.C., first as an Administrative
Assistant to U.S. Senator Dewey F. Bartlett in the early
70's, followed by a career with MAPCO, Inc., an Oklahoma
based energy company, where he served as Vice-
President of Government and Public Affairs, directing their
Washington office.
Mr. Cogman currently serves as Chairman of the National Federation of Independent Business (NFIB) Education
Foundation, Chairman of the Advisory Board for the Partnership for Gender Specific Medicine at Columbia University, Member of the Executive Committee and Board of The
Acting Company in New York, and is a Presidential Appointee to the National Council of the National Endowment for
the Arts.
He is a native of Oklahoma, a graduate of the University
of Oklahoma, and is married with four children.
Carolyn Gallagher
A resident of Austin, Texas, Carolyn Gallagher is currently an investor and advisor to several businesses. She
has 20 years of experience in acquiring and growing
companies. Most recently she was President and Chief
Executive Officer of Texwood Furniture, Inc., a leading U.S.
manufacturer of educational furniture located in Taylor, Texas. Ms. Gallagher purchased Texwood in 1988. After leading the company through 12 years of growth and
profitability, she sold Texwood to Sagus International in
2000. Prior to buying Texwood, Ms. Gallagher was the
President of Houston Trailer, Inc., a subsidiary of Distribution Systems, Inc., a major chemical tank truck company in
Houston, Texas.
Ms. Gallagher earned her undergraduate degree from
Duke University in 1976 and a MBA from the Harvard Business School in 1982. She has been a community leader in
Austin, Texas for many years, chairing numerous non-profit
boards. She is currently a trustee and the immediate past
chair of the board of St. Edward's University. In 1999 she
was appointed to a 6 year term by then Governor George
Bush as a Trustee of the Texas Employee's Retirement
System, which has responsibility for the $20 billion state
employee's retirement fund.
James A. Johnson (Co-Chair)
James A. Johnson is Vice Chairman of Perseus, L.L.C.,
a merchant banking and private equity firm based in Washington, DC and New York City.
Beginning in January of 1990 and continuing through
December 1999 he was employed by Fannie Mae. He
served as Vice Chairman (1990), Chairman and CEO
(1991-1998), and Chairman of the Executive Committee
(1999).
Prior to joining Fannie Mae, Johnson was a managing
director in corporate finance at Lehman Brothers. Before
joining Lehman, he was the president of Public Strategies,
a Washington-based consulting firm he founded to advise
corporations on strategic issues.
From 1977 to 1981, he served as executive assistant to
Vice President Walter F. Mondale, where he advised the
Vice President on domestic and foreign policy and political
matters. Earlier, he was employed by the Target Corporation, worked as a staff member in the U.S. Senate, and was
on the faculty at Princeton University.
Johnson serves as chairman of The John F. Kennedy
Center for the Performing Arts and is chairman of the board
of trustees of The Brookings Institution.
He also serves on the board of the following organizations: The Enterprise Foundation; Gannett, Inc.; The Goldman Sachs Group, Inc.; KB ; National Association on
Fetal Alcohol Syndrome; National Housing Endowment;
Target Corporation; Temple-Inland, Inc.; and United Health
Group. He is also a member of The American Friends of
Bilderberg, The Business Council, the Council on Foreign
Relations, the Trilateral Commission, and he is Chairman of
the Advisory Council for Public Strategies Incorporated. In
March 1994, Johnson was named "CEO of the Year" by
The George Washington University School of Business and
Public Management. He also was named a 1998 "Washingtonian of the Year" by Washingtonian Magazine. In May
2001, he was elected to the American Academy of Arts and
Sciences.
Johnson received a B.A. degree in political science from
the University of Minnesota and a Masters Degree in public
affairs from the Woodrow Wilson School at Princeton. In
1997, Mr. Johnson received an Honorary Doctor of Laws
Degree from Colby College, in 1999 he received an Honorary Doctor of Humane Letters Degree from Howard University, and in 2002, he received a Doctor of Laws Degree
from Skidmore College.
Mr. Johnson lives in Washington with his wife and their
son.
Richard C. Levin
Richard C. Levin, the Frederick William Beinecke Professor of Economics, was selected as the twenty-second
president of Yale in 1993. Mr. Levin was born in San Francisco, California in 1947. He graduated from Lowell High
School in San Francisco, received his bachelor's degree in
history from Stanford University in 1968, and studied politics and philosophy at Oxford University, where he earned a
B. Litt. degree. In 1974 he received his Ph.D. from Yale and
that same year he was named to the Yale Faculty.
A specialist in the economics of technological change,
Mr. Levin has written extensively on such diverse subjects
as the patent system, industrial research and development,
and the effects of antitrust and public regulation on private
industry. In the mid 1980's he directed a major effort to
gather evidence on the incentives for 130 manufacturing
industries' investments in research and development.
Throughout the 70's and 80's, his series of papers on the
Interstate Commerce Commission had significant influence
on the course of railroad deregulation.
Before becoming president, Mr. Levin devoted himself
for two decades to teaching, research, and administration.
His teaching included courses on microeconomics, industrial organization, antitrust, the oil industry, the competitiveness of U.S. manufacturing industries, and the history of
economic thought. He served on dozens of major committees, supervised an unusually large number of doctoral dissertations, and rose in the administrative ranks to become,
first, director of graduate studies in economics, next the
chairman of the economics department, and finally the
dean of the graduate school.
Mr. Levin is a longtime New Haven resident. He and his
wife Jane and their four children have been active and involved in community life. Since becoming president of Yale,
Mr. Levin has made an effort to use his knowledge and concern for the City to build bridges between Yale and New
Haven. In partnership with the City he has supported new
initiatives in the areas of economic development, education
and human services, and neighborhood revitalization.
Downtown renovation, the President's Public Service Fellowships, and the University's buyer Program are examples of initiatives taken in the first few years of his
presidency. He has also initiated a campus renovation program of unprecedented scale and scope, while working to
retain the strength of Yale's exceptional undergraduate college and 11 distinguished graduate schools.
Mr. Levin currently serves as a director of the Hewlett
Foundation, J-STOR, and the National Academy of
Sciences Board on Science, Technology and Economic
Policy. He is chairman of the board of the University
Alliance for Lifelong Learning, a joint venture of Yale,
Oxford and Stanford Universities.
Harry J. Pearce (Co-Chair)
Harry J. Pearce was elected chairman of the Hughes
Electronics Corporation Board of Directors, a subsidiary of
General Motors Corporation, in May 2001. Pearce has
served on the Hughes Board since November 1992. He
had been vice chairman and a director of the General
Motors Corporation Board of Directors since 1996 until his
retirement from General Motors in May 2001.
Pearce had been an executive vice president since
1992 and was vice president and general counsel with responsibility for GM's Legal Staff from May 1987 to August
1994. Pearce joined General Motors as associate general
counsel in October 1985, assuming responsibility for all
product litigation and product safety matters worldwide.
Previously, he had been a senior partner in the law firm of
Pearce & Durick in Bismarck, N.D. In that capacity, he represented GM and other industrial companies nationwide in
a variety of product liability cases over a period of 15 years.
Pearce is Chairman of the United States Air Force Academy's Board of Visitors, Chairman of the U.S. Air Force
Academy's Sabre Society, and a lifetime member of the
U.S. Air Force Academy's Association of Graduates. He
was the recipient of the U.S. Marine Corps Scholarship
Foundation's Colonel I. Robert Kriendler Memorial Award in
1998 and is also serving his fifth year as co-chairman of the
U.S. Marine Corps Scholarship Foundation's Annual Leatherneck Ball. In 2001, he was selected as a recipient of the
first U.S. Air Force Academy's Distinguished Graduate
Award.
During his service career, Pearce served as a Staff
Judge Advocate in the Air Force and was certified as a military judge. On his return to civilian life, he joined a law firm
in Bismarck. He was a municipal judge in Bismarck from
1970 to 1976 and also served as United States Commissioner and U.S. Magistrate. Pearce is also a member of the
board of directors of Marriott International, Inc., MDU
Resources Group, Inc., National Defense University
Foundation, Air Force Academy Association of Graduates,
the Detroit Investment Fund, The Bone Marrow Foundation, The National Bone Marrow Transplant Link, the Lauri
Strauss Leukemia Foundation, the Stewart Francke Leukemia Foundation, Sabriya's Castle of Fun Foundation, Chairman of the GM Cancer Research Foundation and The
Marrow Foundation's Board of Directors, president and
board member of The Leukemia & Lymphoma Society
Research Foundation, and a member of Wayne State University's School of Medicine's board of visitors. He also
serves as a member of the Mothers Against Drunk Driving
(MADD) board of advisors. Pearce is a fellow in the American College of Trial Lawyers and a fellow in the International Society of Barristers. He is chairman of the Product
Liability Advisory Council Foundation and a founding member of the Minority Counsel Demonstration Program of the
American Bar Association's Commission on Opportunities
for Minorities in the Profession.
Pearce is a member of World Business Council for
Sustainable Development (including co-chair of the global
mobility initiative on sustainability), The National Academies' Panel on Science, Technology and Law, The Mentor
Group's Forum for U.S.-EU (European Union) Legal-
Economic Affairs, and The Conference Board. He also
serves as a trustee of Northwestern University, Howard
University, United States Council for International Business, and New Detroit Inc. Pearce was born on Aug. 20,
1942, in Bismarck, N.D. He received a bachelor's degree in
engineering sciences from the United States Air Force
Academy in 1964, where he was a member of the Honor
Committee, the Dean's List, the Commandant's List, and
the Superintendent's List and a recipient of the Major
General Fechet Award. He earned his juris doctor degree
from Northwestern University's School of Law in 1967
where he was a Hardy Scholar, on the Dean's List, and a
member of the National Moot Court Team. He received an
honorary degree of Doctor of Engineering from Rose-
Hulman Institute of Technology in 1997, and an honorary
degree of Doctor of Laws from Northwestern University in
1998 and an Alumni Merit Award in 1991.
Furthermore, in 2001 he received the International
Association of Organ Donation's Corporate Benefactor
Award and The American Jewish Committee's National
Human Relations Award; the National Conference for
Community & Justice Humanitarian Award and The Black
Patriots Foundation Leadership Award in 2000; Parents
magazine's "As They Grow" Award in 1999; The Detroit
News "Michiganian of the Year" Award in 1998; and the
ABA's Commission on Opportunities for Minorities in the
Profession's "Spirit of Excellence" Award in 1997.
Norman Seabrook
Norman Seabrook is president of the New York City
Correction Officers' Benevolent Association (COBA) Inc.,
an 11,000 member municipal labor union that is one of the
two largest law enforcement unions in New York City. President Seabrook represents Correction Officers, the largest
group of employees in New York City's jails, which is by far
the largest municipal jail system in the world.
President Seabrook, 42, became a Correction Officer in
1985. He was the oldest son in a family of six boys and two
girls and was raised by his mother. Throughout his youth,
Mr. Seabrook worked at various jobs. Simultaneously, he
was a student at James Monroe High School in the Bronx
and a student at the John Jay College of Criminal Justice.
He earned a Bachelor of Arts degree from Empire State
College.
Correction Officer Seabrook was assigned to two facilities on the famed Rikers Island. They were the Adolescent
Reception and Detention Center and the George R. Vierno
Center. He also was assigned to the Bronx House of Detention for Men and the Bronx Courts as well as to the very
selective and prestigious Emergency Response Unit.
After eight years of law enforcement as a Correction
Officer, having held no union posts, Officer Seabrook
became disenchanted with COBA's leadership and began a
two-and-one-half year campaign for the union presidency
while working full-time as a Correction Officer. In June
1995, he defeated the well-entrenched incumbent and four
other candidates in an election in which he was seen as a
long-shot. He attributes his victory to his mother, who advised "You can do whatever you want to if you focus on
others. If you're just doing it for yourself, you won't be able
to." Following this advice, President Seabrook accomplished a great deal during his first four-year term and was
reelected in 1999 by an overwhelming margin. His initial
two goals were to make Correction Officers' salaries and
benefits equal to those of police officers and to make the
lives of Correction Officers' widows and children more
comfortable.
Before President Seabrook took office, Correction Officers were invisible to most New Yorkers because they dealt
with detainees and sentenced offenders of one year or less
at city correction facilities. Because Correction Officers
were hidden, their contracts were grossly deficient in benefits and in wages. Through tireless effort, in 1998, President
Seabrook negotiated a contract that gave Correction Officers more than Police Officers received under their contract, which was negotiated by the Patrolmen's Benevolent
Association. Also, as COBA president, Mr. Seabrook had a
number of initiatives enacted into law in Albany. Four are
widely acknowledged to be the most significant pieces of
legislation passed during the entire history of the NYC
Department of Correction, which was founded in 1895.
They are the Variable Supplement Fund Bill, the Heart Bill,
the 3/4 Disability Bill and the Feces Bill.
COBA's Widows' and Children Fund was created by
President Seabrook shortly after he took office. The fund
was created to alleviate the financial burden to the families
of Correction Officers who lost their lives while serving. It
supplements families' incomes during the financially
burdensome holidays of Thanksgiving and Christmas. The
fund provides numerous Christmas presents and schedules day trips to amusement parks and sports events
throughout the year for these families marked by tragedy.
President Seabrook's hard work and natural leadership
ability has afforded him many honors. In 2000, he was appointed to be the Chairman and Spokesperson of the Uniformed Forces Coalition. As such, he negotiated a new
collective bargaining agreement for Correction Officers,
Firefighters, Sanitation Workers, Police Detectives, Police
Captains, Police Sergeants, Police Lieutenants and all other uniformed city employees with the exception of Police
Officers. In 2001, Governor Pataki appointed President
Seabrook to the three-person, bipartisan Task Force to
Reform New York State and New York City Elections. Also,
in 2001, Mayor-elect Bloomberg appointed President
Seabrook to his transition team. President Seabrook's
numerous responsibilities included interviewing and evaluating potential city commissioners and political aides to the
new mayor. The COBA leader is also Vice-Chairman of the
Bronx Democratic Committee and a member of the Board
of Governors of the Pius XII Foundation.
Robert S. Walker
Wexler & Walker's Chairman, Robert S. Walker, is seen
as an expert in science, space, technology and energy
issues and a master of legislative tactics and procedure.
During the 2000 presidential campaign, Walker served as
the Bush advisor on science, space and technology.
In August 2001, Bob Walker was appointed by President
Bush to be Chairman of the Presidential Commission on
the Future of the United States Aerospace Industries.
As a Member of Congress from Pennsylvania's 16th
District, Walker served much of his twenty-year career in
the Republican leadership as Chief Deputy Whip, Chairman of the Leadership, and Speaker Pro Tempore. In 1995,
he was selected as Chairman of the Science Committee
and Vice Chairman of the Budget Committee. And throughout his congressional tenure he was probably best known
for his role as the GOP floor manager in the House.
As a lecturer, writer and commentator, Walker appears
regularly on FOX News, CNBC and PBS, among others,
and lectures at the Brookings Institution, the Georgetown
University Government Affairs Institute, the Kennedy
School at Harvard University, the Cato Institute, the Heritage Foundation, the Woodrow Wilson Center and at several colleges and universities. He is called upon to address
national and international technology forums, and his latest
book, INSIDE THE HOUSE, co-authored with several other
former Congressmen, was released in 2001.
In 1996, Bob Walker became the first sitting House
Member to be awarded NASA's highest honor, the Distinguished Service Medal. He has stayed involved in space
policy as a board member of the Aerospace Corporation,
SpaceDev, and the Space Foundation. In addition, he is
Chairman of the Board of DCH Technology and serves on
the advisory board of the IMAX Corporation. His community
outreach work includes the boards of the U.S. Capitol Historical Society and the American League of Lobbyists.
Joseph R. Wright
Joe Wright is president and CEO of PanAmSat Corporation, one of the largest providers of global video and data
broadcasting services via satellite, operating a worldwide
network of 22 in-orbit spacecrafts reaching 98% of the
world's population. Prior to taking this position in 2001, he
was Vice-Chairman of Terremark Worldwide, operator of
Network Access Points (NAP's) in the U.S., Europe and
Latin America.
He was also Chairman of GRC International that provided advanced IT, Internet and software technologies to
government/commercial customers. After a turn around, it
was sold to AT&T. He was also Co-Chairman of Baker &
Taylor a Carlyle majority owned book/video/software distribution company. From 1989 to 1994, Joe was EVP, Vice
Chairman and Director of W.R. Grace, Chairman of Grace
Energy Company and President of Grace Environmental
Company. From 1982-1989, he was Deputy Director and
Director of the Federal Office of Management and Budget
(OMB) and a member of President Reagan's Cabinet. Prior
to that he was Deputy Secretary of the Department of Commerce and he previously held the position of President of
two Citibank subsidiaries; was a partner of Booz Allen and
Hamilton, and held various management and economic
positions in the Federal Departments of Commerce and
Agriculture. Mr. Wright currently serves on the Board of
Directors/Advisors of AT&T Government Solutions, Titan
Corp., Proxim Corp., Terremark Worldwide, Baker & Taylor,
Verso Technologies, and the Federal Governments NRIC
(FCC) and PMAC (OMB).
REMARKS BY POSTMASTER GENERAL
JOHN E. POTTER PRESIDENTIAL COMMISSION ON THE U.S. POSTAL SERVICE - WASHINGTON,
DC
JANUARY 8, 2003
Thank you Chairman Pearce, Chairman Johnson.
Commissioners . . . thank you all for agreeing to be on the
Commission and for allowing me to participate in this first
meeting of the President's Commission on the Postal
Service.
I want to begin by thanking President Bush for putting
this panel together. The fact that the President chose to
form the Commission at this time attests to his interest and
concern about the future on the Postal Service. And for that
we are grateful.
I also want to thank Treasury Undersecretary Peter
Fisher for his comments this morning, and for understanding the challenges we must overcome to provide affordable, universal service for everyone in America in the
future.
Joining me today is Richard Strasser, our Chief Financial Officer and Executive Vice President.
At the conclusion of my remarks, Dick will add some
detail and perspective about our finances and the challenges associated with funding a $67 billion organization.
I want to begin with a brief overview of the size and
scope of the Postal Service of today and the massive mailing industry that has evolved and grown over the past 30
years.
As Secretary Fisher mentioned, ours is a truly national
industry today - interconnected with thousands of American businesses that employ 9 million people whose work is
directly related to or dependent on the nation's mail. Together, it's a $900 billion industry that relies on the 750,000
men and women of the United States Postal Service.
It was 35 years ago that a Presidential Commission began examining America's postal system.
Their recommendations were the basis for the Postal
Reorganization Act of 1970 that established the United
States Postal Service.
• The Post Office Department had been receiving up to
20 percent of its revenue from tax payer subsidies.
• There were limited funds to expand and improve the
infrastructure.
• Service had fallen.
• Employees were stuck in a personnel system where
politics often outweighed merit when it came to
promotions.
From that flawed system, the Postal Service emerged to
act in a more businesslike manner.
In the years since 1970, we have lived up to our mandate to provide affordable, universal mail service to every
American regardless of where they live, where they work,
and regardless of their economic circumstances.
The United States Postal Service has been successful.
The Postal Service has grown with America and the
economy.
• The number of addresses served has increased 72
percent since 1970.
• Mail volume has grown from 87 billion pieces to 203
billion pieces of mail.
• The price of the First-Class stamp, adjusted for inflation, is essentially the same as it was in 1971.
The Reorganization Act brought about significant
changes in the way management approached the business. We used our increased flexibility to transform from a
primarily manual operation to a highly mechanized operation in the 1970s and '80s to what is today a highly automated operation.
Over the past 30 years, we've looked at the entire mail
chain from printing to delivery. When we saw volume increasing dramatically in the late '70s and early '80s, we had
two options: invest in more infrastructure or get our customers involved.
We chose to engage our customers to help us find equitable ways to share the work and share the savings. The
net result is $15 billion in annual worksharing discounts for
our customers and less investment in buildings and equipment for the Postal Service.
The point is the Postal Service made a strategic decision not to own everything. We looked at the least combined costs of alternatives and felt that worksharing and
customer involvement was in the nation's best interest. The
postal network is an open system.
Postal reorganization also changed our approach to service. By the 1980s we were no longer the only game in
town. Competition compelled us to rethink what we had
been doing.
We moved to independent performance testing for First-
Class Mail - and we publicly reported service results on a
quarterly basis. The initial results were not what the American people deserved.
Today, service performance is at record levels and we
continue to publicly report our First-Class Mail performance
scores. Customer satisfaction is also at record levels.
So with all that good news, you are probably asking
yourselves, why are you here.
Ladies and gentlemen, the Postal Service is challenged
by changes in the marketplace - primarily electronic
communication.
Our primary source of revenue is First Class letter mail.
Twenty-five percent of postal revenue comes from bills and
payments - the segment of the mail most vulnerable to
electronic diversion.
The potential significant diversion of letters to electronic
medium challenges our basic business model. That model
assumes that mail volume and revenue growth will finance
the Postal Service's growing infrastructure of some 1.7 million additional delivery points per year. As new s,
towns and cities are built, the Postal Service must grow
with them.
In addition, GAO raised concerns regarding long-term liabilities and obligations related to debt repayment, pension
costs and health care benefits for retirees.
As a result of all these concerns, in 2001, the Senate requested us to put together a Transformation Plan. Simply
put, they asked us to look ahead and come up with strategies to assure that the needs of the American public would
continue to be met in the future.
This past year we seized the initiative to transform the
Postal Service - to begin the process of preparing for the
future - to preserve America's trust in our ability to deliver.
The Transformation Plan has three basic elements. The
first element all centers around doing a better job with the
resources we have under the current legislation.
• It lays out specific goals for improving service and operational efficiency.
• It identifies specific ways we will grow our business
by enhancing products and expanding customer access to postal services.
• And it details plans and strategies to improve financial performance.
This past year, we made great strides in transforming
the Postal Service while maintaining our focus.
Service is at all-time highs. Productivity is up. Employee
complement has been reduced by over 45,000 through
attrition in recent years.
We've committed to take $5 billion in expenses out of
our operating base over five years and are well ahead of
our plan.
However, bio-terrorism, recession, and electronic diversion have negatively impacted volumes.
Despite productivity gains, we have had to raise rates 15
percent over the two year period. No question, those rate
increases have hurt growth.
Despite stiff competition and a changing marketplace,
we are working hard to encourage growth.
For example, we are exploring alternatives such as
phased rates for future rate cases, negotiated service
agreements, and adding value to our existing mail products
through information technology.
As the Postal Service looks to the future, we recognize
that there is a need to change the legislation under which
we operate. The second portion of the Transformation Plan
addresses short term legislative change.
Recently, OPM completed an extensive review of USPS
pension obligations for employees covered under the Civil
Service Retirement System and concluded that we would
find ourselves in an overpayment situation were we to continue payments on the current schedule as set by a 1974
law.
We are pleased that the Administration has drafted legislation to correct this situation. If enacted, it would reduce
the Postal Service's annual payments to the CSRS fund by
some $2.9 billion in 2003.
The combination of management's efforts to improve
productivity, coupled with a change in pension legislation,
could enable us to hold rates stable until 2006. It would also
enable us to lower our debt, something I know Treasury favors. This stability in rates and debt obligations would foster
some growth in the mailing industry, but wouId do little to
reverse electronic diversion.
The third piece of the Transformation Plan addresses
the need for long-term legislation. That's where you come
in. We certainly welcome any and all recommendations by
the Commission to improve service and efficiency within
the current legislation, and will actively pursue those
recommendations.
However, today, you the members of this Presidential
Commission, have an historic opportunity to offer your findings and recommendations to make the postal system a
viable, efficient and affordable service to all Americans well
into the future.
We urge the Commission to engage in a thorough review of the key public policy issues related to the Postal
Service.
From the early years of our history, the principal defining
public policy that has guided and governed the Postal Service has been the vision of a universal mail service.
That vision was founded on the notion of equal access
to postal services that would connect the American people
for generations to come. Equality demanded that uniform
rates be set, that a single stamp can get your letter from
anyplace in America to its destination anywhere in
America - whether that's around the block or around the
country.
Equality demanded regular delivery to every mailbox be
provided to everyone, not just the privileged and well-to-do.
That promise still holds true today. But our society is far
removed from the world of our forefathers. Today, we live in
a highly technological environment that has created a
fiercely competitive - one where change is inevitable but
also critical.
Our customers have changed as well.
Technological advances offer our customers more
choices and more options to communicate across town and
across the world. More choices and options signal a shift in
customer behavior that favors the service provider best
equipped to meet changing customer needs.
Meeting those changing needs demands that we
change. That's what the Transformation Plan is all about.
The question now before us, however, is how to define the
needs of our customers, the American people in the decades ahead.
Since 1994, the Congress and the entire mailing industry has debated public policy issues including:
• Strict pricing regulation to pricing flexibility.
• Binding arbitration with labor to the right to strike.
• Breakeven to retained earnings.
• A $15 billion borrowing limit to doubling that amount.
• Fewer post offices to more post offices.
• A stricter monopoly to no monopoly.
In the end it's not about any single issue. It's about universal service to the American people.
The key question is how can we continue to provide the
universal service to all Americans and still make it affordable in the face of potentially declining mail volume. That is
the central public policy issue facing this Commission.
As you may have concluded, the issues related to postal
services in this country are complex.
The mailing industry comprises a wide spectrum of varied interests and conflicting opinions about Postal Service
reform and transformation. And everybody in the country is
a customer of the Postal Service.
That's why we welcome this opportunity to work with the
members of this Commission in a thorough and objective
assessment of the Postal Service.
Collectively, you represent a wide spectrum of business
experience and expertise that will enable you to bring a
new and unbiased perspective to the public policy issues
facing the Postal Service now and, most importantly, in the
future.
Thank you Chairman Pearce and Chairman Johnson for
this opportunity. I'll now turn to CFO Strasser who will provide a more in-depth review of our service and financial
positions.
# # #
The following procedures were approved by the
Commission during the January 8, 2003, public hearing
in Washington, DC:
In Executive Order No. 13278, the President has asked
this Commission to report to him by July 31. The creation of
several subcommittees consisting of members of this
Commission can help expedite our work so that we can
successfully meet our reporting deadline. Each of the subcommittees will conduct a detailed review of specific aspects of the Postal Service and will be fully supported by
Commission staff. The creation of subcommittees is also
consistent with the Federal Advisory Committee Act under
which we operate.
More specifically, we propose the creation of four separate subcommittees with the following names: Business
Model, Private-Sector Partnership, Technology Challenges, and Workforce.
The Business Model Subcommittee will be responsible
for assessing the Postal Service's current "government
corporation" business model. As part of this assessment,
the Subcommittee will study the Postal Service's universal
service obligation, the mail delivery infrastructure, the current rate regulation system, and pricing flexibility. This Subcommittee will also assess the "Commercial Government
Enterprise" business model proposed by the Postal Service
in its own Transformation Plan.
The Private-Sector Partnership Subcommittee will be
responsible for analyzing the current role of the private sector in the mail delivery system, including negotiated service
agreements, outsourcing, and work-sharing. It will also attempt to identify opportunities for the Postal Service to enter into partnerships with the private sector as it seeks to
become more efficient and effective.
The Technology Challenges Subcommittee will be responsible for assessing the impact of new technologies -
such online bill payment and presentment, e-mail, and
electronic funds transfer - on the Postal Service's business and attempt to determine whether these technologies
will continue to erode the Postal Service's market share.
The Subcommittee will also assess the Postal Service's
own technology initiatives and their impact on productivity
and financial performance.
The Workforce Subcommittee will be responsible for assessing the Postal Service's current collective bargaining
and dispute resolution procedures as well as reviewing alternative models. It will review employee pay and other associated labor costs; productivity; employee recruitment,
training and development; and workers' compensation. The
Workforce Subcommittee will also review the status of the
Postal Service's unfunded pension and retiree health care
liabilities.
These proposed subcommittee jurisdictions are intended to be illustrative of the issues that each subcommittee should explore. Each subcommittee will, of course, be
free to explore any related issues that it determines would
be helpful to fulfilling its mission. In addition, the Commission may determine it is necessary to create additional
subcommittees.
Each subcommittee will have a chairperson who will be
the individual principally responsible for directing the subcommittee's work. It is also our hope that at least three
members of this Commission will join each subcommittee.
Each of the two co-chairs will be ex-officio members of
each subcommittee. Any Commission member may join as
many subcommittees as he or she desires so long as that
individual is willing to discharge the responsibilities of subcommittee membership.
As you know, the next public meeting of this Commission will take place on February 20 in Washington, DC. It is
our hope that two of the subcommittees will report their preliminary findings to the Commission at the February 20th
meeting. The two remaining subcommittees will report their
findings at a subsequent Commission meeting. We will
work with the subcommittee chairs as we establish the
agendas of future Commission meetings.
# # #
The following procedures were approved by the
Commission during the January 8, 2003, public hearing
in Washington, DC:
The President has clearly outlined the mission of this
Commission in Executive Order No. 13278. According to
the Executive Order, the Commission must consider the follow issues:
1) the role of the Postal Service in the 21st century and
beyond; 2) the flexibility that the Postal Service should have
to change prices, control costs, and adjust service in
response to financial, competitive, or market pressures;
3) the rigidities in cost or service that limit the efficiency of
the postal system; 4) the ability of the Postal Service, over
the long term, to maintain universal mail delivery at affordable rates and cover its unfunded liabilities with minimum
exposure to the American taxpayers; 5) the extent to which
postal monopoly restrictions continue to advance the public
interest under evolving market conditions and the extent to
which the Postal Service competes with private sector services; and 6) the most appropriate governance and oversight structure for the Postal Service.
The Executive Order also charges the Commission with
considering "such other issues relating to the Postal Service" that the Commission determines are appropriate subjects for review.
During this process of examination, the Commission is
committed to ensuring that every affected and interested
party has an opportunity to share its views and concerns
with us. Any party that wishes to submit a written statement
on any issue or issues that fall within the established scope
of the Commission's mission is strongly encouraged to do
so.
The Commission has established three methods by
which statements can be submitted for consideration and
review:
1. Transmission by Email to the following address:
pcusps_comments@do.treas.gov. Statements can
be embedded in the Email as ASCII text or sent as a
MS Word or ASCII text attachment. Do not include
artwork or other graphic elements.
2. Stored on 3 1/2 inch high density computer disk as a
MS word or ASCII text document (Windows format
only) and mailed or hand-delivered to: President's
Commission on the United States Postal Service,
1120 Vermont Avenue, N.W., Suite 971, Washington,
DC 20005.
3. Typewritten statements may be mailed or hand-
delivered to: President's Commission on the United
States Postal Service, 1120 Vermont Avenue, N.W.,
Suite 971, Washington, DC 20005.
Email transmissions must be received by the Commission no later than 5:00 p.m. on Wednesday, February 12.
Mailed submissions must be postmarked no later than 5:00
p.m. on Wednesday, February 12.
The Commission encourages parties to limit their statements to a maximum length of 25 pages of double-spaced
written text. Any statement exceeding 15 pages in length
should be accompanied by a one-page "executive
summary."
Please be aware that the Commission may, at its discretion, post any statements it receives on the Commission's
website at www.treas.gov/offices/domestic- finance/usps.
If you have any questions about this public comment
process, please contact Randall Lewis of the Commission
staff at (202) 622-6075.
# # #
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