Bush Forms Independent Panel to Study Postal Service Reforms

President Bush on Wednesday created an independent commission to examine the U.S. Postal Service’s operations and recommend what could be the first major reforms of the agency since the 1970s.

The executive order creating the commission charges the nine members “to examine the state of the United States Postal Service, and to prepare and submit to the President a report articulating a proposed vision for the future of the United States Postal Service.” The report is due July 31.

Bush’s authorization of the new panel came a day after the postal service announced it had lost $676 million in the fiscal year that ended Sept. 30.

“The Postal Service has been faced with ongoing financial issues that will require a very comprehensive look, so that we can make certain that we have sustainability of postal service to American people,” White House Press Secretary Ari Fleischer said.

The postal service in recent years has faced competition from private delivery services, e-mail and Internet bill paying, shrinking the number of packages and letters delivered by 4.6 billion during the last fiscal year.

Administration officials, addressing those concerns, stressed that the panel was not a first step toward privatizing the postal system.

“This is not a stealth project to privatize the Postal Service,” said Peter Fisher, undersecretary of the Treasury. “We want them to explore all avenues. Everything else is on the table.”

The commission will be working at the same time the Postal Service is seeking to become financially stable, as outlined in a transformation plan delivered to Congress in April.

Already underway is a cost-cutting program aimed at trimming $5 billion by 2005. Postmaster General John E. Potter announced in October that the agency was on track to reach that goal, having cut $2.9 billion largely by reducing the work force through attrition by 23,000 in 2002.

Another 12,000 employees are slated to go in 2003, leading to another $1 billion in cost reductions by this time next year, Potter said, which should mean the Postal Service will be $600 million in the black at the end of this fiscal year.

The issues the commission has been told to consider -- flexibility in prices to respond to financial or market pressures, the efficiency of current operations and the long-term ability to affordably maintain universal mail delivery -- are the same factors the Postal Service has outlined for itself.

The commission “is consistent with -- and complementary to -- the Postal Service’s Transformation Plan,” Potter said at Wednesday’s announcement. “The commission is good news coming at the right time.”

The creation of the commission was welcomed by the nation’s large mailers, the companies that print and mail catalogs, mass mailings and other direct-to-consumer materials in-house.

John Campanelli, president of RR Donnelley Logistics, a large direct mailer whose clients include Lands’ End, Sports Illustrated and TV Guide, said, “We support the independent commission assuming the commission will work to seek input from interested parties.”

For more than six years, large mailers have lobbied Congress seeking legislation to change the Postal Service’s business model in the hopes of preventing future rate increases, Campanelli said. RR Donnelly hopes the new presidential commission will make those changes happen.

“Postal reform is one of those issues that stays eighth on the priority list,” Campanelli said of efforts in Congress.

Co-chairing the panel are Harry Pearce, chairman of Hughes Electronics Corp., and James Johnson, chairman of the Brookings Institution, a nonpartisan think tank based in Washington, and former chief executive of the lender Fannie Mae.

The other members are Dionel Aviles, president of Texas-based Aviles Engineering Corp.; Don Cogman, chairman of CC Investments in Arizona; Carolyn Gallagher, former president of Texwood Furniture in Texas; Robert Walker, chairman and chief executive of Wexler Group, a unit of the public relations firm Hill & Knowlton; Joseph Wright, president and chief executive of PanAmSat, a Connecticut firm that makes and operates a fleet of satellites; Richard Levin, president of Yale University; and Norman Seabrook, president of the New York City Correction Officers’ Benevolent Assn.