FROM THE OFFICE OF PUBLIC AFFAIRS
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December 11, 2002PO-3685
U.S. Postal Service
James A. Johnson and Harry Pearce Named as Commission Co-Chairs
Treasury Under Secretary for Domestic Finance Peter R. Fisher and Postmaster General John E. Potter today announced that President George W. Bush is establishing a Commission on the U.S. Postal Service. At the request of the President, James A. Johnson, Vice Chairman of Perseus, L.L.C., and Harry Pearce, Chairman of Hughes Electronics Corporation, will serve as Co-Chairs of the Commission.
The nine-member bipartisan Commission will identify the operational, structural, and financial challenges facing the Postal Service; examine potential solutions; and recommend legislative and administrative steps to ensure the long-term viability of postal service in the United States. The Commission will submit its report to the President by July 31, 2003.
“The President recognizes that now is the time to re-assess how the Postal Service should adapt to pressure from customers, competitors, and technology, and best fulfill its mission in the 21st century,” said Under Secretary Fisher. “The Commission will be an invaluable tool to develop strategies to meet the operational challenges that the Postal Service faces and to chart a course that will build a healthy financial foundation. It will help us learn how the Postal Service can execute its mission more efficiently and cost-effectively. Inaction is unacceptable - for taxpayers, for mailers, and for current and former Postal Service workers.”
“We remain committed to implementing the Transformation Plan that the Postal Service submitted to Congress earlier this year,” said Postmaster General Potter. “Consistent with our Transformation Plan, we expect that the findings and recommendations of the Commission will reaffirm our commitment to ensuring that the Postal Service can maintain reliable and affordable mail service to all communities across the country.”
The U.S. Postal Service is the linchpin of a $900 billion domestic mailing industry. The domestic mailing industry represents eight percent of Gross Domestic Product and employs nine million workers. The fundamental challenge for the Postal Service is that its business model is at great risk. Last reorganized in 1971, the Postal Service has succeeded in reducing federal subsidies and, with other improvements, has constrained cumulative losses to $6 billion since 1972.
However, at the end of their most recent fiscal year, the Postal Service owed the Federal government, and ultimately the American taxpayer, $11 billion (cumulative losses plus borrowings for capital and operational expenses).
One of the greatest challenges for the Postal Service is decreasing volume as business communications, bills and payments, move increasingly to the Internet. For the last four years, the annual volume of individual first-class letters has declined from 54.3 billion to 49.3 billion, even though the Postal Service adds about 1.7 million new delivery addresses per year. That decline, coupled with competition from the private sector, has brought about a substantially different business environment. These developments require a responsible federal government review of government-provided mail service.
In addition to Co-Chairs Johnson and Pearce, Commission members include Dionel Aviles, President of Aviles Engineering Corporation, Texas; Don Cogman, Chairman, CC Investments, Arizona; Carolyn Gallagher, former President and CEO, Texwood Furniture, Texas; Richard Levin, President, Yale University, Connecticut; Norman Seabrook, President, New York City Correction Officers’ Benevolent Association, New York; Robert Walker, Chairman and CEO, Wexler Group, Washington, DC; and Joseph Wright, President and CEO, PanAmSat, Connecticut.
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