Copyright 2000 The Denver Post Corporation
The
Denver Post
December 29, 2000 Friday 1ST EDITION
SECTION: BUSINESS; Pg. C-02
LENGTH: 608 words
HEADLINE:
Turmoil awaits Postal Service Red ink shows overhaul needed
BYLINE: By Bill McAllister, Denver Post Washington
Bureau Chief,
BODY:
WASHINGTON - For nearly five
years, Rep. John M. McHugh, R-N.Y., tried to convince members of
Congress that the U.S. Postal Service was facing a serious crisis.
But few postal officials supported McHugh, chairman of
the House Postal Service Subcommittee, and legislation he said
would preserve the government's often-abused 'snail mail'
delivery operation in the age of electronic mail.
Then, the
Postal Service Board of Governors, a group that had remained
noticeably quiet during McHugh's struggles, suddenly declared last
month that it was time for postal reform.
The unanimous
vote of the board - nine presidential appointees charged with
overseeing the independent postal agency - came too
late to rescue McHugh's postal reform legislation.
It died without reaching the House floor.
But the board's
statement appears likely to set the stage for yet another
congressional struggle over how the federal government's largest
civilian employer sets stamp prices and what its future should be at
a time when cheaper electronic communications such as faxes and
e-mail have begun slicing away profitable components of the mail
stream.
What appears to have moved the board of governors to
action was the recent recommendation of the independent Postal
Rate Commission. The agency approved the governors' request for
a 34-cent first-class stamp, a 1-cent increase, effective Jan. 7.
But the commission, which must approve stamp-price
increases, rejected other rate increases, accusing the governors of
padding their request for more revenue. That infuriated some of
the governors.
'Some drastic changes are needed in the way
this agency operates,' said governor Ned R. McWherter. The entire
board agreed, as did Postmaster General William J. Henderson.
What the rate commission did by rejecting the rate
increases was to cause the agency's red ink to soar above the $ 480
million loss that Henderson has projected for the current year. With
labor talks with the agency's politically powerful unions under way,
the agency faces still more costs, enough said governor Tirso
del Junco, of Los Angeles, to bring the losses for the year to $
1.5 billion.
The Postal Service hasn't seen that much red ink
since 1992, when they hired former automaker Marvin T. Runyon to take
charge of the agency and cut its staff drastically.
The
governors were proud of having set the agency on a path to record
profits under Runyon and were appalled by the prospect of another
series of large deficits, like those the agency ran up in the 1970s
and '80s after it was directed to live without large tax subsidies.
But the governors may have created an equally
daunting challenge for themselves if they hope to do what McHugh
failed to accomplish.
Under the House Republican leadership's
rules, McHugh will have to step aside when Congress convenes in
January.
When the governors begin to draft their plan for what
they want from Congress, they will have to confront something
they probably don't like either: Most commercial mailers are
happier with the five-member rate commission than with the governors.
The commission has protected them from the demands of
postal bureaucrats who would like nothing more than to offset
the agency's soaring costs with higher stamp prices, they say.
So can the governors, who haven't agreed on what they
want from Congress, quickly devise a legislative package that
lawmakers will accept? It's going to be a difficult challenge, most
postal officials agree.
LOAD-DATE: January
03, 2001 
