**To the President's Commission on the U.S. Postal Service**

**February 11, 2003**

**Testimony by:** Steve D. LeNoir, National President

National League of Postmasters

1023 North Royal St., Alexandria, VA 22314

The National League of Postmasters, formally organized in 1904,
advocates for Postmasters all across the country -- from the smallest to
the largest. We speak in support of all current as well as retired
Postmasters while providing professional and member benefits to them.
Our mission is to provide quality service to the American public.

Sixty-two percent of today's approximately 27,000 Postmasters are
categorized as non-exempt (supervising less than two employees.) This 62
percent comprises small post office operations located in rural America.

While statistics in the past have shown that over half of the post
offices don't break even, this is not a true picture. While the postage
revenue is collected where the mailer enters the mail into our system,
the cost of delivering the mail is borne by the post office that
ultimately delivers the piece. To say that over half of the post offices
lose money is not a fair analysis.

While this Commission will address the very challenging issues needed to
improve the financial health of the Postal Service, it must not overlook
people who need to be counted---but must not be measured by a dollar
value. Rural customers are not second-class citizens; they deserve
access to postal services that those in metropolitan areas enjoy. Over
55 million people reside in rural America and having a local post office
is important to them.

The League is hopeful that this commission will, as it is mandated, look
to improve the Postal Service and its bottom line, but not neglect to
identify the need to continue universal service and access to a post
office. The League feels there is so much more we can do. Our network of
post offices provides a unique chance to expand numerous non-postal
services at our facilities. We feel there is some opportunity to best
utilize the infrastructure we have. We take a lot of pride in serving
our customers, and we need to realize our full potential.

Expansion of services should be considered, whether it be banking,
savings bond sales and redemption, voter registration, ATM machines, fax
or copy services, money transfers, area maps for sale, special service
lines for small business customers, pre-stamped package boxes, or Notary
Public service. Computer service could be provided at designated post
offices, giving customers unable to afford a computer this access.

What government assistance needs can be handled through an
infrastructure and overhead already in place? We suggest looking into
the feasibility of assisting with the administration of Medicare and
federal prescription drug programs. Numerous customers in rural America
already use the postal system as the main avenue for delivery of
prescription drugs when there are no pharmacies nearby. Our government
could also use viable post office sites as repositories for Medicare
programs and/or equipment.

What is the role of the rural post office in non-revenue customer
service? Many rural Postmasters now help customers with low literacy
levels, providing assistance in writing checks or money orders to pay
bills, addressing envelopes, as well as reading and explaining mail to
them. State and federal forms are available on site, as well as space
for a community bulletin board in addition to the posting of federal
notices. The rural location often provides a safe haven for children as
a school bus stop or serves the need for a community meeting place if
there are few other options.

There are challenges in making the grass roots visible in a \$67 billion
organization. The Postal Service is truly a national industry,
interconnected with thousands of American businesses that employ 9
million people whose work is directly related to or dependent on the
nation's mail. It's a \$900 billion industry that relies on the 750,000
men and women of the Unites States Postal Service.

In the years since 1970, we have lived up to our mandate to provide
affordable, universal mail service to every American regardless of
his/her economic circumstances. We operate with no taxpayer subsidies.
Mail volume has grown from 87 billion pieces to 203 billion pieces of
mail---40 percent of the world's mail. The price of the First Class
stamp, adjusted for inflation, is essentially the same as it was in
1971.

Competition has compelled us to rethink what we have been doing. Today,
service performance is at record levels and we continue to publicly
report our First Class Mail performance scores. Customer satisfaction is
also at record levels. The Postal Service faces the challenge of a
growing infrastructure of some 1.7 million additional delivery points
per year.

While service is at all-time highs and productivity is up, the employee
complement has been reduced by over 45,000 through attrition in recent
years. We've committed to taking \$5 billion in expenses out of the
Postal Service's operating base over the next five years.

As the Postal Service looks to the future, we recognize that there is a
need to change the legislation under which we operate. The Office of
Personnel Management (OPM) completed an extensive review of USPS pension
obligations for employees covered under the Civil Service Retirement
System (CSRS) and concluded that we would find ourselves in an
overpayment situation were we to continue payments to the CSRS fund on
the current schedule as set by a 1974 law. Legislation, if enacted,
would reduce the Postal Service's annual payments to the CSRS fund by
some \$2.9 billion in 2003.

You, as members of this Presidential Commission, have an historic
opportunity to offer your findings and recommendations to make the
postal system a viable, efficient, and affordable service to all
Americans well into the future.

From the early years of our history, the principal defining public
policy that has guided and governed the Postal Service has been the
vision of a universal mail service. That vision was founded on the
notion of equal access to postal services that would connect the
American people for generations to come. Equality demanded that uniform
rates be set, that a single stamp can get your letter from any place in
America to its destination anywhere in America---whether around the
block or across the country. Equality demanded that postal services be
provided to everyone, not just the privileged and well to do, but
including rural and urban areas that are not perceived as being
profitable.

A past inquiry initiated by the Postal Rate Commission looked into many
aspects of rural America. It reported that rural Americans are 26
percent of the population, and make up 34 percent of Americans with
incomes below the official poverty line. The study also pointed out that
small towns have the highest concentrations of elderly people. This
profile of rural America has not changed substantially since the study
was completed. We believe post offices fulfill a need for this segment
of the population as well as provide invaluable service to these
customers that cannot be measured in dollars. We believe post offices
must be measured by the service they provide, and not be judged solely
on financial considerations.

Every person in the country is a customer of the Postal Service. The key
question is how can we continue to provide the universal service to all
Americans and still make it affordable in the face of declining mail
volume?

We, the League and Postmasters, welcome this opportunity to work with
the members of this Commission in a thorough and objective assessment of
the Postal Service. Our association has been actively looking at
added-value services that have potential in the smaller---and
smallest---post offices. We continue to look for revenue producing
options and ideas as the Commission and Postal Service do their
respective jobs, and stand ready to participate in new initiatives as a
partner.

Thank you for this opportunity to testify.