Recent Testimony by David Walker, Comptroller of the United States before  the Subcommittee on Oversight of Government Management, the Federal Workforce, and the District of Columbia, Committee on Homeland Security and
Governmental Affairs, U.S. Senate on March 15, 2006

Recently, the [Postal] Service  issue an updated Strategic Transformation Plan (Plan) that details its goals and strategies for the next 5 years. We support the intent of the Plan, including the Service’s recent efforts to begin optimizing its operating network. However, as we recently reported, the success of the Service’s optimization efforts will require enhanced transparency of its decision-making criteria, effective coordination with all key stakeholders, and a process for evaluating and measuring performance. Furthermore, we continue to believe that the Plan’s incremental steps alone cannot remedy the major challenges facing the Service. Despite its efforts, the Service’s underlying business model depends on growing mail volume to mitigate rate increases and cover its universal service costs. This model is unsustainable because it lacks the necessary incentives and flexibilities to achieve sufficient cost savings needed to offset growing personnel costs, declining mail volumes, and the continued expansion of the Service’s delivery network. We continue to believe that comprehensive postal reform is urgently needed to modernize the Service’s business model.

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