[Congressional Record Volume 145, Number 105 (Thursday, July 22, 1999)]
[Extensions of Remarks]
[Pages E1635-E1636]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




           PRIVATIZATION OF THE UNITED STATES POSTAL SERVICE

                                 ______
                                 

                          HON. PHILIP M. CRANE

                              of illinois

                    in the house of representatives

                        Thursday, July 22, 1999

  Mr. CRANE. Mr. Speaker, remember that old excuse ``the check is in 
the mail''? In the

[[Page E1636]]

``old days,'' this excuse could be used more easily than today, when 
the myriad of electronic options makes sending a check a nearly 
instantaneous procedure. In fact, they are not even called ``checks'' 
anymore, but are called electronic financial transfers. With the 
telecommunications, computer and information technology revolution, 
there are a variety of options to get a document or payment from one 
place to another. As we use these advancements more and more in 
everyday life, the U.S. Postal Service (USPS) is losing steam, and its 
revenues are being greatly affected. Some even wonder if the Postal 
Service will become to the 21st Century what the horse-drawn carriage 
was to the 20th Century.
  The federal government itself is taking advantage of these 
developments and using electronic means to do much of its business. For 
example, this year, millions of Americans paid their taxes and received 
refunds through electronic financial transfers. Many Social Security 
beneficiaries also receive their payments in the same manner--an 
electronic deposit into their bank accounts, thereby eliminating the 
role of the Postal Service. And, the federal government is saving 
taxpayer dollars by operating in this way. It costs approximately 43 
cents to send a payment by check versus 2 cents to send funds 
electronically. Thus, fundamental change is necessary to enable the 
USPS to adapt and compete in this rapidly changing world.
  The USPS has conceded that they do not operate in a legislative 
framework that allows them to be responsive in adapting to these 
changes in technology and to competition with these new services. In a 
1995 speech, former Postmaster General Marvin Runyon said that USPS is 
losing a lot of its financial and business mail due to such 
technological changes, which has created competition from e-mail, 
electronic financial transfers, fax machines, and the Internet.
  Mr. Speaker, as you will agree, the vast majority of USPS employees 
are hard-working people who want to deliver their product in the 
fastest, most efficient way possible. For the most part, the problem is 
not with the employees of USPS--it is with the legislative mechanism 
that limits their ability to do their job effectively. First, the 
Postal Service has an absolute monopoly over first-class mail--there is 
no competition and thus no motivation to improve service. Also, the 
federal government subsidizes USPS. Thus, it has no real motivation to 
improve service. Also, the federal government subsidizes USPS. Thus, it 
has no real motiviation to be in the black at the end of the year 
because it can borrow from the Federal Treasury when necessary. The 
Postal Service does not have to pay taxes, and therefore has no real 
incentive to improve its efficiency. In total, USPS has no motivation 
to become more productive and efficient because it will continue to 
operate due to its subsidy and a lack of competition.
  For these reasons, I am reintroducing legislation to convert USPS 
into a totally private corporation, owned by its employees. This 
legislation calls for this transition to be implemented over a five-
year period, after which the current monopoly over first-class mail 
would end. To make sure USPS has a fair chance at succeeding as a 
private corporation, my legislation allows for the cost-free transfer 
of assets currently held by USPS to the private corporation. 
Consequently, USPS would have an enormous infrastructure to start with 
that they are already familiar with, and the ability to create new 
products and services to make it competitive with other corporations 
providing services it can only dream of challenging today. To increase 
the motivation of employees to work hard and make USPS competitive, the 
employees would own the corporation, making their earnings contingent 
on the amount of work they put in.
  In past Congresses when I have introduced this legislation, I have 
been opposed by those who believe that privatization would result in 
the Postal Service being chased out of all metropolitan markets, 
leaving it with troublesome rural areas to service. With changes in 
technology occurring everyday, the USPS is more likely to be left with 
rural and bulk mail if it remains in its current government-subsidized 
form, than if it privatizes and has plenty of options to respond to the 
technology revolution.
  For these reasons, I hope the employees of USPS will carefully 
consider this proposal and recognize its merits, as they stand the most 
to gain with privatization. I continue to hope that my colleagues in 
the House of Representatives might join me in this effort to privatize 
the USPS so that it will be a responsive, efficient service for all 
Americans to use in the years to come.

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