Postal Service Sees Profit of $414 Million : 7% Increase in Mail Volume, Reduction in Inflation Credited

Postmaster General Albert V. Casey today projected a $414-million profit this year for the Postal Service, which finished last year with a $251-million deficit.

The dramatic recovery which almost certainly will stave off general rate increases in 1986 or 1987. It takes 18 months to prepare and implement a rate increase, and none is in the works.

Casey attributed the good financial news to a 7% increase in mail volume and lower inflation rates.

A cost-of-living increase for postal workers, which became effective May 10, was 3 cents an hour instead of 10 cents, as had been projected, because of a lower inflation rate than had been expected. That saved $1 million a week.

After hearing the prediction and other reports at its regular meeting, the Postal Board of Governors returned to closed session to continue its search for a new postmaster to replace Casey, who is to quit on Aug. 15.

Chairman John R. McKean said the field has been narrowed to two current postal employees and two or three outsiders. He said he did not expect the board to reach a final decision today.

An announcement of a new postmaster general is scheduled during the Aug. 4-5 board meeting.

Committees Abolished

At its meeting, the board abolished all but one of its standing committees, including a contingency committee established to find a new postmaster general last fall, when some board members expressed dissatisfaction with Paul N. Carlin, then postmaster general.

Carlin has sued in federal court to get his job back when Casey retires, contending that the contingency committee was illegally constituted, met in secret without knowledge of the entire board and in violation of the government open meetings law, and spent money for an executive search without authorization.

The board retained its audit committee and adopted rules to govern payment of expenses of its own members.

The guidelines come five weeks after former Vice Chairman Peter E. Voss quit the board and pleaded guilty to charges that he padded his expense account by almost $44,000.

The board’s lawyer, Joseph A. Califano Jr., said an audit conducted in the wake of the Voss affair uncovered no expense account cheating by other board members.

Voss also admitted that he took $20,000 in kickbacks to help Recognition Equipment Inc. of Irving, Tex., in its bid for a $250-million mail sorting equipment contract.