Warns Budget Cuts Will Affect Services : Tisch to Resign as Postmaster General

Postmaster General Preston R. Tisch, decrying recently mandated budget reductions that he said will severely undercut planned postal improvements, announced Tuesday that he will resign to return to the private sector.

Tisch told the Postal Board of Governors during its monthly meeting that he would step down “sometime in the spring of 1988” to return to the Loews Corp., which he left as president to join the Postal Service 18 months ago.

He said that the budget cuts recently approved by Congress as part of its federal deficit reduction effort were not the reason for his decision, asserting that he originally had intended to leave this year after instituting management reforms.

However, he noted that several major postal improvements he planned will go undone as a result of the agreement to cut 52% of a $4.3-billion capital projects budget for 1988 and 1989.

‘Consequences Clear’

“The consequences of that are clear,” Tisch told the postal governors. “We have been forced to defer virtually all new facility construction contracts and reduce expenditures for new equipment and customer convenience service.”

He said that these moves, while accomplishing Congress’ goal of reducing spending, “will carry a very high cost” in the long term because the delay of modernization will increase operating costs over time.

Seventy projects costing at least $5 million each and another 532 projects costing less than $5 million each will be put on hold during the two-year period, said Louis A. Everhardt, a postal spokesman.

Postal officials said that the board will begin a search for a successor to lead the agency, which has a 1988 fiscal year budget of $36.6 billion.

Louis Delgado, staff director of the postal subcommittee of the House Committee on Post Office and Civil Service, praised Tisch for his “competence and integrity” and said that he hopes his successor will be another “outsider” who “would come in with a fresh approach.”

Tisch, 61, replaced interim Postmaster General Albert V. Casey in August, 1986, in a move designed to stabilize management and improve service at the agency. He took over in the wake of a purchasing scandal that implicated several postal officials and representatives of private businesses that had postal service contracts.

Automation Program

In an effort to improve the service’s efficiency, Tisch renewed an automation program and pressed for the purchase of new postal vehicles and construction of more facilities.

However, in the last few months, it became clear that his ambitious plans would fall victim to the budget-cutting drive in Congress. In addition to reining in capital improvements spending, Congress barred the service from raising first-class mail rates beyond the 3-cent increase approved for this year. That increase, hiking stamps to 25 cents, is expected to go into effect in April.

In recent weeks, the Postal Service unleashed a flurry of reports criticizing the budget constraints, charging that they threaten to drastically reduce the quality of service. Among possible changes, officials said, is elimination of Saturday mail delivery in some offices.

Speaking with reporters after the postal board meeting, Tisch said: “The U.S. Postal Service is at a point where the next postmaster general needs to make a three- to five-year commitment to following up on programs.”

Chief Accomplishments

Tisch said that the chief accomplishments in his brief tenure included “building a stronger relationship with Congress,” improving relations with postal unions and professional associations and “moving the Postal Service’s automation program forward.”

Tisch did not say what position he would assume when he returns to Loews, the New York-based hotel and entertainment company owned by his family. A Postal Service official said that Tisch’s family members had been pressing him to return to the business.

However, the official said that the budget problems apparently played a part in his decision to leave the $99,500-per-year job. Noting that Tisch’s personal wealth has been estimated at $950 million, the official said, Tisch probably was sending this message to the federal government: “If you’re not going to let me manage the thing, I’m going back to my own business.”