Mailing Systems Technology - November/December 2008 - (Page 33) So, if you are Jack Potter, what do you do? I’ve had a few people ask me this question and there is no easy answer. Of course, the Postal Service will continue to do what it has done remarkably well: it will continue to shed costs. It will also focus seriously on growing revenue. But growing revenue in challenging economic times is not easy for any business, especially a mature business that has seen some of its customers turn to the Internet. The prognosis seems dire, but I have a couple of recommendations that would help. Both require the help of our friends on Capitol Hill. One provision in the Postal Accountability and Enhancement Act requires the Postal Service to prefund its retirees’ health benefits. The payments are amortized over 10 years and come to about $5 billion a year. The 10year amortization schedule was built into law primarily to satisfy budget hawks in Congress. This pre-funding plan had an impact on the “scoring” of the overall gov- ernment budget, which is too confusing to explain in this small space. The bottom line, however, was that some members of Congress insisted that the new postal law have a minimal impact on the overall budget — no matter the cost to the Postal Service and users of the mail. So, why not tweak that part of the law and make a longer amortization schedule for the pre-funding of retiree health benefits? If this schedule were over 20 years, the Postal Service would save about $2.5 billion a year, which would go a long way toward shoring up USPS finances. Congress is willing to bail out financial institutions that gambled on risky investments. The postal industry wouldn’t even be asking for a bailout, just a longer time to pay its pre-funding plan. Yes, that’s right its pre-funding plan, which by the way, will make it one of the only government entities to have dynamically funded its retiree health benefits. Here’s my second suggestion to Congress: Allow the Postal Service to right-size its network. The Postal Service needs the freedom to align its network to meet today’s mailing and shipping needs. It needs to gain efficiencies to drive down costs and secure service, which is the underpinning of its brand. If members of Congress want to insist that postal facilities can’t be closed in their districts, then pony up the money through an appropriation. Otherwise, let the Postal Service do the right thing. These are challenging times and there is no time for dawdling. We don’t have the luxury of debating for a decade a change in our postal law. Congress needs to step to the plate and give the nation’s postal system the relief it deserves. Kate Muth is VP of the Association for Postal Commerce. Contact her at kmuth@postcom.org, 703-524-0096 or visit www.postcom.org. a WWW.MAILINGSYSTEMSTECHNOLOGY.COM | NOVEMBER-DECEMBER 2008 33 http://www.postcom.org http://www.printmailconsultants.com http://www.printmailconsultants.com http://www.MailingSystemsTechnology.com
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