No Stamp of Approval for Postal Rate Hikes US Postal Service claims rate increases are fair, but it is merely eluding downsizing that the rest of government must undergo

THERE they go again. Last month, the United States Postal Board of Governors announced an increase in postal rates to 32 cents a letter - a hike of 10.3 percent. If approved by Postal Rate Commission, the new rates will take effect in 1995. This would be the ninth time the Postal Rate Commission raised rates since it and the Postal Board of Governors came into being in 1971. The cost of mailing a first-class letter then was 8 cents. When one considers that between 1932 and 1958 it cost 3 cents to send a letter, one could conclude that the Service has succumbed to a rate-raising obsession. The Postal Service clothed its announcement with all the conventional gobbledygook one has come to expect. It proclaimed that the public should be grateful to it for not charging even more. It even contends that because it did not raise rates earlier, it actually is saving the public money. The Service further asserted that the increase was a "good deal" for consumers because, even after the increase takes effect, Americans would still be paying less to send their letters and pay their bills than Germans and Japanese. Germany charges 74 cents; Japan, 57. This argument brings to mind others that were made a year ago in favor of higher gasoline taxes. Then, Americans were told that they needed to pay more at the pump because their counterparts in Europe and Japan were forking over $5 per gallon. Why is a declining standard of living in the US a worthy objective? The Postal Service expects to run a deficit of $1.3 billion this year. It is no secret that it has been steadily losing business to competitors from all quarters: express-mail carriers, electronic mail, fax machines, telephone and television advertising, for example. Apparently this federally chartered monopoly believes the only way it can hold its own is to raise rates on remaining customers. Would anyone give a business that continually charged a shrinking pool of customers higher prices for the same or less service much chance of survival? Yet the Service stumbles on. Of late, it has been losing the patronage of even its best customer and single parent - the US government. Some of the feds have been entrepreneurial enough to negotiate discounts and "cut rates" with private express-mail companies. The postmaster general recounted in a recent television interview how he had leaned on offending agencies to refrain from using private mail companies for "nonurgent" parcels. He never mentioned the unreliability of the Service's own overnight and express mail as a reason for Uncle Sam's impatience. IMAGINE a semi-independent government-owned corporation congratulating itself on persuading the government not to pursue cheaper, faster, and more dependable alternatives because its interests would suffer. Reformist policy wonks in the ex-Soviet Union and elsewhere, take heed. It has been nearly 25 years since Congress last looked seriously at how mail delivery in the United States is managed. The last time it did so was in 1970, when it passed the Postal Reorganization Act. The act sought to make the Service entirely dependent on "user fees" rather than a combination of fees and general revenues. In this legislation, Congress removed the Postmaster General from the Cabinet, replaced the Post Office Department with the Postal Board of Governors as the Service's policymaker, and delegated rate-setting powers to a five-member Postal Rate Commission. The Board consists of nine part-time members, who are appointed by the president and confirmed by the Senate. They each receive $10,000 a year plus expenses and name a postmaster general and a deputy postmaster general. The postmaster receives a salary commensurate with that of Cabinet officers, $148,400; the deputy, $400 less. The Service employs approximately 700,000 full-time employees and owns, operates, or leases more than 250 million square feet of space throughout the US and its possessions. The members of the Postal Rate Commission are appointed by the president and confirmed by the Senate. The chairman earns $123,000 and the other members, $115,000. The group has 10 months to decide whether to approve the requested rate increase. At a time when a $47.5 billion business is running mounting deficits, should not common business practices such as pay cuts, downsizing, and reorganizations be in order? Might now be the time to free the Service from civil service and procurement regulations that impede good management practices and increase costs and delays? Could not salaries and other benefits be linked to bottom-line performance? Why not contract out the printing of commemorative "souvenir" issues? (Remember the suspense the Service put the country through a while back as it publicly anguished over whether to proceed with a "young Elvis" or an "older Elvis" likeness?) And while they are at it, why not put into play the "P" word that is being uttered repeatedly in Vaclav Havel's Prague, Rudolph Giulianni's New York, and Bret Schundler's Jersey City, but rarely in Washington - "privatization"? It is time Congress and Vice President Gore's "reinventing government" advisers got to work redesigning this dinosaur before the "information highway" puts it out of its misery.

Dr. Alvin Felzenberg

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