U.S. postmaster general renews call for freedom to set rates

Sunday, June 1, 2003

WASHINGTON -- If the Postal Service is to be run like a business, it needs the freedom to set its prices like a business, postmaster general John Potter said Thursday.

Potter told the President's Commission on the Postal Service that his agency is hampered by the complex 16-month process involved in setting rates.

The post office, because it has a monopoly, should still be subject to review, he said, but that process "should not stifle the ability to meet customer preferences and finance the national mail system for the future."

Potter suggested that the Postal Service's governing board be allowed to set prices for mail service, with an after-the-fact review by an outside agency.

His comments came at the final public session of the commission, convened by President Bush to review the operations of the Postal Service and make recommendations for its future. Its report is expected by the end of July.

A series of postmasters general have complained in recent years that the rate-setting process stifles their ability to compete in the marketplace by offering volume discounts, making rapid price changes where necessary and offering new services.

Under the current system the agency proposes a rate change which is then reviewed by the independent Postal Rate Commission for up to 10 months. The commission then makes a recommendation which the board can agree to, ask for reconsideration of, or overrule if unanimous.

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