Remarks of the Honorable Edward J. Gleiman 

Chairman, United States Postal Rate Commission 

before the 

National Association of Postmasters of the United States 

August 27, 1996 
National Association of Postmasters of the United States 

August 27, 1996 

President Bates, Secretary-Treasurer Carrico, delegates, and distinguished guests. 

 

As I look out and see hundreds of NAPUS delegates who represent the more than 

43,000 active and retired postmasters, I know I am looking at the true front line of 

the Postal Service. Two years ago, I had the pleasure of joining you at your 

convention in Albuquerque. Then, I stressed the importance of “service” in Postal 

Service. As you may recall, the Postal Service was receiving a fair amount of 

criticism at the time about deteriorating service. Well, all that has changed, and I 

know who should get the thanks. While in Washington officials at headquarters 

issue press releases, give speeches and sit around thinking fancy thoughts, I know 

it is you, the leaders in the field, postmasters in places like Clanton, Alabama; 

Palisades, Colorado; Elmont, New York; Silver Spring, Maryland; and Camden, 

Arkansas, who ultimately are responsible for making sure the Postal Service 

delivers. And, a good many of us in Washington realize that, more-often-than-not, 

postmasters deliver in spite of, not because of, Postal Service headquarters. 

Moreover, I know you are not just getting the mail out -- making sure that 

hundreds of millions of letters, cards, flats, and parcels get to the right place each 

day in a timely manner -- managing your office and your workforce. You also are 

dealing with customers, explaining complex mailing rules such as the July 1st 

reclassification regulations, and, many of you serve as respected leaders in your 

communities. 

You are doing a fine job. Thank you for your efforts. 

 

Understandably you have some serious concerns these days; concerns that we at 

the Commission and I, personally, share. First and foremost is the matter of how 

best to ensure a strong and viable Postal Service. Then, there is the increasing 

number of post office closing appeals filed with the Postal Rate Commission, 

which raises concerns about the future of these important community fixtures. 

The NAPUS intervention, and the individual letters from postmasters retained in 

the Commission’s public commenter file, make clear your concerns about the 

Postal Service’s proposal to increase post office box fees as part of the current 

Special Services Reform case. Your efforts in the Congress, led by your Director 

of Government Relations Teena Cregan, tell me you are concerned about some 

aspects of the far reaching reform bill (H.R. 3717) recently introduced in the 

House of Representatives by Chairman John McHugh of the Subcommittee on the 

Postal Service. 
I would be remiss if I didn’t pause here to give some credit where it is due. While 

I, just as you, have questions and concerns about the reform bill, Chairman 

McHugh deserves a great deal of credit for the courage and concern he has shown 

in tackling a very complex and politically difficult issue. I think it is important to 

keep in mind that while he is attempting to balance many interests, it is clear that 

he cares deeply about the future of the Postal Service and appreciates the 

importance of universal service. 

Before I get to our shared concerns I would like to take a few minutes to talk about 

the Postal Rate Commission. 

The Postal Rate Commission

Two years ago, in Albuquerque, I talked quite a bit about the postal ratemaking 

process which, of course, is the primary responsibility of the Postal Rate 

Commission. I won’t replow that ground, but I find that for many in the postal 

community, the Postal Rate Commission remains somewhat of a mystery. 

The Commission consists of five, presidentially-appointed Commissioners who 

serve six-year terms. It has a staff of 45 (down from 55 two years ago). It is 

totally independent of the Postal Service. It is a unique institution; probably the 

closest analogy would be a public utility regulator at the state level, although the 

Commission regulates only one entity -- the Postal Service. 

The Commission exists to consider Postal Service proposals for postal rate and 

classification changes and to provide a forum where postal customers, consumers, 

and the general public can express their views on those proposals. After 

considering these views, the Commission applies the rate setting provisions of the 

Postal Reorganization Act to make recommendations on these proposals to the 

Postal Service Governors. While the Commission’s recommendations carry great 

weight, it is the Governors who make the final decisions on rate and classification 

matters. 

 

From time-to-time, big business mailers, postal officials and I guess even a few of 

you have taken shots at the Postal Rate Commission. Someone or another is not 

happy with what we’ve recommended, most likely because of how it will affect 

his or her pocketbook; some complain that the process takes too long or that it 

seems too adversarial. You know, when you think about it , these criticisms echo 

criticisms leveled at all regulatory bodies or at any entity which reviews, watches 

over, and questions the activities of another group. The attacks even parallel the 

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tension between postal employees and postal management relative to consultations 

and bargaining. In any event, I understand and I appreciate these criticisms. 

While you have been working on improving service to your customers, we at the 

Commission have tried to do the same. Since I last spoke with you: 

• we have finished a major rate case in record time, enabling the 

Postal Service to earn an additional half billion dollars in 

unexpected revenue; 

• one of our recommendations in that case was the flat $3 Priority 

Mail rate, which has become a cornerstone of USPS advertising 

and has led to increased volume; 

• our recommendations in reclassification phase I supported the 

Service’s interests and were accepted by the Governors (the first 

time in recent memory they didn’t ask us to go back to the 

drawing board); 

• the Service filed an experimental case for pre-barcoded small 

parcels (they asked us to finish in four months; we approved it in 

less than three months); 

• we worked with the Postal Service and others to develop 

regulations streamlining many of our procedures; and, 

• we completed the non-profit reclassification case in just three 

months. 

We may not always agree with the Postal Service, but then again, who does? We 

do care about and are interested in doing our best to ensure a strong and viable 

U.S. Postal Service. 

Post Office Closings 

One of the areas where we occasionally find ourselves in disagreement with the 

Postal Service is in matters involving appeals of post office closings. 

When last I spoke with you, I pointed out that the Postal Service had markedly 

reduced the number of post office closings during the past several decades and that 

the closure rate had dropped to 200 or fewer per year. There was some hope that 

this trend would continue. Unfortunately, that has not proven to be the case. 

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According to press reports, the number of post office closings reached record 

levels in fiscal year 1995. The number of post office closing appeals the 

Commission has received thus far in fiscal year 1996 suggests the trend toward 

more closings may be continuing. The number of 1995 appeals (22) was the 

highest since 1986, and the number in 1996 is only one short of that mark (21) 

with two months still to go in the fiscal year. So-called “temporary suspensions”, 

which do not fall within our jurisdiction, may actually portend even larger 

numbers of closings in the future. 

Publicly, at least, the Service is proud of its wide-spread, geographical presence. 

It’s ads tout “40,000 retail outlets.” So, what’s driving this increase in post office 

closings? 

The 1992 downsizing and concurrent “early outs” arguably created an unusually 

large number of postmaster vacancies with corresponding opportunities to close 

small offices. But that effect should have worked its way through the system by 

now. There is another possible factor in the increased number of closings: among 

the goals of the Postal Service for the next few years is to increase revenue by one 

billion dollars a year AND cut costs by a billion dollars a year. It may be only 

coincidental that post office closings are on the increase, but I can not help 

wondering -- after hearing a very senior postal official tell the Direct Marketing 

Association just last year that closing several thousand small post offices could 

save a billion dollars -- whether something more is afoot. 

For its part, in those cases when closings are appealed, the Commission will 

continue to ensure that the Postal Service complies with every aspect of the law. 

And, we will continue to seek changes in the law which we believe are consistent 

with Congress’ intent to maximize citizens’ opportunities to retain their local post 

offices. 

The Special Services Reform Case (Docket No. MC96-3) 

The Postal Service filed its proposal on June 7th. The parties are presently 

engaged in the discovery phase of the case, asking written questions of the Postal 

Service about its proposals. Formal hearings are scheduled to begin in September. 

Various special services are involved -- insurance, registry, post office boxes, 

certified mail/return receipts, special delivery, and postal cards. The Postal 

Service has described this case as the third phase of classification reform. But, 

Commissioner Edward Quick, the Commission’s Vice Chairman and Presiding 

Officer in this case, noted the case has significant revenue implications: 

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[U]nlike the first two phases of reclassification, the proposals 

in Docket MC96-3, if approved in their current form, would 

generate a considerable amount of additional net revenue for 

the Postal Service, approximately $340 million. Until now, 

revenue increases this high have only been seen in omnibus 

rate cases, . . . . 

This precedent has already caught the attention of some of the 

Postal community's keen observers. In its June 17 issue, 

Postal World said: “The Postal Service needs bucks to 

prevent a general rate hike and will seemingly take almost 

any tack to get it. Now it's after an extra 340 million a year in 

the new, higher special services rates . . . .” 

In its June 17 issue, Business Mailers Review notes that 

MC96-3 "looks more like a rate case" and says the additional 

revenue the Postal Service would receive from the proposal is 

"one-third of the way to the Marketing Department's goal of 

one billion dollars in new revenue.” 

The post office box aspect of this case is a major revenue raising component of 

this Postal Service initiative; the expectation is that fee changes will yield an 

additional $134 million in revenue. The post office box fee increase has received 

considerable attention and was the subject of a formal Commission request 

(known as a Presiding Officer’s Information Request or POIR) to the Postal 

Service for background data on the proposal and written questions (known as 

interrogatories) asked by NAPUS. While I am somewhat restricted in what I can 

say about a case that is currently before the Commission, a quick review of 

already public documents will show that the Commission is scratching its 

collective head about the same issues that concern NAPUS and those individual 

postmasters who have written us. The Commission also has such questions as: 

which boxes will really see increases and by how much; are there some $2 boxes 

that will go to $16, rather than free; will overall Postal Service costs go up as 

customers opt for delivery instead of paying increased fees? 

That NAPUS is participating in this case is testimony to the need for a process that 

(1) allows questions to be asked, and (2) requires answers to be given, before 

decisions are made. 

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The Commission is, in essence, a referee that applies the rules handed down by 

Congress in the Postal Reorganization Act. As a referee, it is not surprising that 

the Commission is sometimes accused of making “bad calls” by contestants who 

appear before it. Thus, it is also not surprising that the bulk of the postal reform 

legislation now being considered deals with the role of the Commission vis-à-vis 

the Postal Service. 

Postal Reform Legislation 

Teena Cregan’s article in the July Update gave an excellent summary of 

Congressman McHugh’s far-reaching postal reform bill. And, I have had the 

benefit of reviewing President Bate’s July 18 testimony before the Postal Service 

Subcommittee. Importantly, your organization recognizes the downward pressure 

the bill’s price-cap approach inevitably would place on postal wages and salaries. 

The debate has just begun, and some of it already has been interesting. 

I must admit I was struck by the Postmaster General’s position on H.R. 3717. For 

almost two years he has been asking the Congress to give the Postal Service the 

ability to compete. He wants private sector “flexibility” to enter new markets and 

roll out new products without a regulatory oversight mechanism, which he has 

characterized, repeatedly, as cumbersome and time consuming. 

Well, Chairman McHugh’s bill would give the Postmaster General what he is 

asking for -- the freedom to compete in competitive markets. But it does more 

than that. It attempts to level the competitive playing field by making the Postal 

Service subject to the same fair competition requirements that apply to private 

sector companies such as AT&T, IBM, and yes, UPS and Federal Express. 

Under the McHugh bill some, but not all, Postal Service activities would be 

subject to the anti-trust laws and Federal Trade Commission and Department of 

Justice oversight. The Postal Service would be liable for treble damages if it acted 

unfairly, and its Governors would be subject to civil and criminal penalties, the 

same as directors of private sector companies. Finally, its statutory monopoly 

would be narrowed by changing the “double postage” rule and by exploring 

whether the “mail box” rule should continue. 

There’s an old saying: “Be careful what you ask for; you may get it” or, as Forest 

Gump might have put it, “legislation is like a box of chocolates -- you never know 

what you’re gonna get!” That may be what has happened to the Postmaster 

General. Testifying before Chairman McHugh he complained that the “proposed 

bill would add two new layers of oversight authority -- the Federal Trade 

Commission and the Department of Justice.” He worried that “relaxation of the 

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Private Express Statutes by the establishment of a $2 price threshold [in place of 

the current $3 or double the first class postage -- whichever is greater -- rule] 

would put more than $4 billion of our current business at risk.” 

The PMG’s testimony reminded me of a sign my grandfather had over his desk. 

My grandfather, as you may recall from my last convention speech, retired from 

the Post Office in 1949. At the time, he was superintendent of Merchant’s Station, 

which served the business district in Baltimore, Maryland. Well back to that sign 

-- and, yes, I am old enough to remember it -- it read: 

 Man is a fool. When it’s hot, he wants it cool. When it’s cool, he wants it 

 hot. Always wanting what is not! 

For some time I have been troubled by the notion that the Postal Service must 

enter new, unrelated markets and strive to capture market share from private 

enterprises. Maybe I am old-fashioned, but I think the Postal Service is here to 

provide a government sponsored (as opposed to government subsidized) service, 

and that service is delivering hard copy messages and parcels. Generally 

speaking, new postal products are okay, but I think the Nation would be better 

served if headquarters management would spend more time supporting your 

efforts in the field and less time on trendy ideas for which the Service is ill-suited 

and which are unlikely to provide substantial additional net revenues. 

If, however, the Congress believes the Postal Service should be competing in other 

markets, I see my job as head of an independent regulatory agency as providing 

whatever insight and assistance I can to ensure that the legislative product is 

realistic and workable, and that it does not irreparably harm an incredibly 

important institution -- our United States Postal Service. 

As I said, the debate has just begun. Chairman McHugh and his subcommittee 

should be commended for the thorough and thoughtful way they are meeting their 

congressional oversight responsibility. 

I will close by once again commending your dedicated service. A blurb in a 

recent NAPUS Update really brought home the magnitude of the job you and 

those who work with you do. It was titled “How Much is a Billion?” and went 

like this: 

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Consider this: 

• one billion seconds ago, John F. Kennedy was President of the 

United States. 

• one billion minutes ago, Julius Caesar was ruling Rome. 

• one billion letters ago, was the day before yesterday in the U.S. 

Postal Service. 

Keep up the good work and enjoy your convention and your stay here in Salt 

Lake.