GAO: Postal Service business model not working

Monday - 4/12/2010, 2:06pm EDT

By Dorothy Ramienski
Internet Editor
Federal News Radio

The current business model of the United States Postal Service doesn't work and USPS needs to make deeper job and wage cuts, according to a report released Monday by the Government Accountability Office.

The report says that the Postal Service continues to lose money because it can't respond fast enough to declines in mail volume and revenue.

The Postal Accountability and Enhancement Act of 2006 requires that the congressional watchdog evaluate reform strategies proposed by USPS. GAO looked at the viability of the business model, current strategies and options to address challenges, and what actions need to be taken by both USPS and Congress.

GAO recommended financial relief from Capitol Hill and revisions to USPS's retiree health benefit funding. The report also recommends that Congress should set up a panel of experts to develop proposals for broader legislative and operational reform.

The Postal Service has agreed with the findings of this latest GAO report, but postal officials have expressed concerns about the panel and its timing.

As Federal News Radio has been telling you, Postmaster General John Potter recently testified on Capitol Hill about the status of his agency.

Potter has already called for moving to five-day a week delivery, as well as for changing how USPS funds its pension program.

Some officials guess that the Postal Service will lose a record $7 billion in the fiscal year that ends in September, and they say it could lose at least $238 billion in the next decade if Congress fails to act.

(Copyright 2010 by FederalNewsRadio.com. All Rights Reserved.)