[Congressional Record Volume 143, Number 70 (Friday, May 23, 1997)]
[Extensions of Remarks]
[Page E1051]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

[[Page E1051]]



                   PRIVATIZE THE U.S. POSTAL SERVICE

                                 ______
                                 

                          HON. PHILIP M. CRANE

                              of illinois

                    in the house of representatives

                         Thursday, May 22, 1997

  Mr. CRANE. Mr. Speaker, remember that old excuse ``the check is in 
the mail''? In days gone by, that excuse could be used more easily than 
today because no other options were available to pay bills or to send 
written messages. With the telecommunications, computer, and 
information technology revolution, however, there are a variety of 
options at the public's fingertips to send documents and payments, such 
as e-mail, electronic financial transfers, and facsimile transmissions. 
As these technological advancements are used more routinely in everyday 
life, it is putting increased downward pressure on the U.S. Postal 
Service's [USPS] revenue stream. Unless we take action to unleash the 
Postal Service from its current restraints, it is likely to become, to 
the 21st century, what the horse drawn carriage became to the 20th 
century.
  It is clear that we live in a rapidly changing world. In recent 
years, we have witnessed an explosion of technological innovations that 
have enabled people to do much more at home and at work faster than 
they ever could before. In today's highly competitive global economy, 
those who can do more, faster, have an edge over their competition. And 
so, market forces drive the computer and information technology 
revolution to continue to surpass previous limitations and speeds. As 
the world continues to seek ways of getting the job done more 
efficiently, traditional mailbox delivery service is being left behind. 
In fact, in a 1995 speech, Postmaster General Marvin Runyon said that 
the legislative framework governing the USPS is no longer in tune with 
the Nation's long-term postal needs. A major reason cited by the 
Postmaster General was the competition the USPS is facing from e-mail, 
electronic financial transfers, and fax machines. He went on to point 
out that the USPS had already lost 35 percent of its financial mail in 
the previous 5 years and 33 percent of its business mail to alternative 
forms of communication and transmission.
  Even the Federal Government has recognized the advantages of 
alternative methods of making payments and issuing benefits. By the end 
of 1999, the U.S. Department of the Treasury plans to collect $1 
trillion in tax payments via computers. Already, the Treasury 
Department says that 55 percent of all payments made by the Federal 
Government are now sent electronically. In less than 2 years, all 
current and future Social Security beneficiaries will have their money 
directly deposited into their bank accounts. The savings to the 
taxpayers from these electronic transfers become apparent when you 
consider that it costs the Government 43 cents to send a payment by 
check versus 2 cents per payment to send funds electronically. In the 
economy overall, a recent study, by Arthur D. Little, forecast that by 
the year 2000, electronic correspondence and transactions may overtake 
traditional mail in market share. Clearly, fundamental change is 
necessary to enable the USPS to adapt and compete in a rapidly changing 
environment.

  Generally speaking, I am convinced that the vast majority of USPS 
employees are conscientious, hard-working individuals, who want to 
provide competitive, top notch service. For the most part, the problem 
is not so much with them as it is with the system in which they have to 
work. Put simply, the system lacks the incentives necessary to bring 
about the gains in productivity and customer service that are essential 
for the USPS to live up to the public's expectations and needs. For one 
thing, the USPS is insulated against competition in the delivery of 
first-class mail, which means customers need not be won over, but can 
be taken for granted. For another, it is subsidized by the Federal 
Government, through its ability to borrow from the Federal Treasury 
when it loses money and the fact that it does not have to pay taxes, 
which means there is less pressure to be efficient. A third reason lies 
in the fact that the USPS does not have to operate under any bottom-
line incentives, such as a profit motive, which serve as the 
underlining motivator in making private companies so productive.
  For this reason, I am reintroducing legislation today which would 
convert the USPS into a totally private corporation owned by postal 
employees. My bill calls for this transition to be implemented over a 
5-year period, after which the USPS' current monopoly over the delivery 
of first class mail would end. To make the prospects for success of the 
new private corporation even more likely and attractive, my legislation 
calls for the cost-free transfer of the assets held by the USPS to the 
employee-owned corporation. Not only would a privatized Postal Service 
inherit a tremendous infrastructure advantage to assist in this 
transition, it would be free to develop entirely new products and 
services quickly to respond to market needs and demands. Moreover, as 
owners of the Postal Service, the employees would benefit from having a 
stake in the corporations success and profitability.
  In the past, the major objection that the USPS has raised to 
privatization and the repeal of its monopoly has been that it would 
result, allegedly, in cream skimming by USPS competitors of 
metropolitan areas, leaving the USPS with the financially troublesome 
prospect of being left with only rural and bulk mail to deliver. 
However, the logic behind such an argument overlooks the significance 
of the telecommunications and computer revolution underway. With the 
rapid growth in the use of facsimile machines, modems, internet, 
electronic mail, the truth is the USPS is more likely to be left with 
rural and bulk mail to deliver if it does not privatize than if it 
does. For this reason, I hope that the fine men and women of the USPS 
might seriously consider this proposal and examine its merits. I hope, 
too, that my colleagues might join me in this effort because only by 
keeping up with the times and the competition can the USPS hope to 
thrive in the future.

                          ____________________