February 10, 2003

James A. Johnson

Harry J. Pearce

Co-Chairs, President's Commission on the United States Postal Service

1120 Vermont Avenue, N.W., Suite 971

Washington, DC 20005

Gentlemen,

As the head of one of America's leading taxpayer advocacy groups, I can
assure you that reforming the US Postal Service is as important to
taxpayers (and as pivotal to improving the overall economy) as any issue
one could posit. Business activity worth over a trillion dollars is
conducted through the mail every year, and an efficient, reliable, and
affordable letter mail delivery system is crucial to restoring and
maintaining our nation's economic vigor.

But that ideal letter mail delivery system cannot be realized through
over-frequent and over-sized rate increases, nor through exploiting
monopoly services and diverting revenues into non-essential ventures.
Indeed, such measures would only serve to impede the very same business
activity the mail system is intended to abet by muscling entrepreneurs
and innovators out of the postal market.

If the USPS is to fulfill its charge to deliver the mail at a reasonable
price, it must concentrate intently on that historical core mission,
instead of looking to such non-postal services as e-commerce for
additional income. The USPS should be reformed through narrowing its
focus, not broadening its scope.

First and foremost, the USPS is not a business, despite protestations to
the contrary. It's a government agency masquerading as a corporation.
But if it's going to operate in the guise of a business, and be as
effective as one, it should be governed like one. In the aftermath of
corporate scandals such as Enron and WorldCom, rules requiring greater
transparency and accountability in the USPS' operations would be of
tremendous value.

To that end, a vigorous, entirely independent, and fully empowered audit
is clearly in order, and your commission should recommend that one be
sanctioned. While all agree that the USPS, as currently constituted,
cannot long survive in this rapidly changing marketplace, there is still
considerable controversy over how best to proceed on a course of reform,
controversy borne in large part by the USPS' relative operational
opacity.

If sunlight is the greatest disinfectant, let someone besides the Board
of Governors or the Inspector General force open the window a little bit
wider.

Such an audit would also help to elucidate the immediate and long-term
benefits of restraining costs and discourage fanciful notions of
maximizing revenue through massive rate increases and new services.
(Corporate recovery in the private sector emphasizes cutting calories
over finding more food -- a similar approach should be found as
appropriate for the USPS.)

With labor costs gobbling upwards of 80% of operating expenses and
growth in mail volume flat-lining, the USPS' day of reckoning is likely
to come sooner rather than later, and the one general solution for its
one general problem is becoming increasingly obvious: If the USPS sticks
to its monopoly letter mail services, there'll be less for the USPS to
do, so there should be less USPS employees.

Reducing workforce through expanded attrition -- or better yet, a hard
and fast hiring freeze -- would delay the need for future rate increases
and halt the USPS' offering of unnecessary and inherently questionable
non-postal products and services.

All we need is a roadmap to that destination. You can help draw it.

Onward,

Grover Norquist