- The Washington Times - Wednesday, December 5, 2001

ASSOCIATED PRESS
The Postal Service, battered by the terrorist attacks and a declining economy, saw its first drop in volume in a decade and finished the fiscal year with a $1.68 billion loss.
Managers are scrambling to cut expenses, seeking help from Congress and discussing the possibility of speeding up a rate increase.
"The economic recession, the September 11 attacks and the anthrax attacks tossed our financial situation up in the air," Postmaster General John Potter said yesterday.
Figures for the year that ended Sept. 30 show the agency with income of $65.8 billion and expenses of $67.5 billion. It was the second consecutive year the agency finished in the red, after making profits for five years.
Mail volume for the year totaled 207 billion items, down about 400 million from the year before. In the first two months of this fiscal year, volume remains sharply lower.
The faltering economy and increased competition were the primary causes of the losses, along with the September terror attacks, said postal Chief Financial Officer Richard Strasser.
Even though the anthrax mailings occurred after the start of this fiscal year, they too pose major financial problems for the postal service, worsening the outlook for the current year.
The terrorist attacks have had a "profound and tragic effect on the Postal Service," said Robert Rider, chairman of the agency's Board of Governors.
He said managers are making every effort to cut costs and find other sources of money so that the unexpected costs can be covered without increasing rates more than previously planned.
President Bush has released $175 million in emergency money, and postal officials have gone before Congress requesting additional aid.
Two postal workers have died of anthrax and others have been sickened. The agency faces massive costs for medical care, decontaminating buildings, sanitizing the mail and planning future ways to protect the mail.
Eight machines are being built that can irradiate the mail to kill bacteria, and officials said they are exploring other options to keep the mail clean.
The post office has applied to the independent Postal Rate Commission for an increase next year that would add three cents to the current 34-cent first class stamp. Stamp prices last went up in January, by a penny.
The next increase had been expected to take effect in late September or early October of next year, but officials said it could be moved up to as early as June.
Raising postal rates is a complex process in which the post office goes before the rate commission with its request, and opponents are allowed to make arguments for changes.
At the urging of the rate commission, the post office and the opponents are negotiating an agreement on new rates.

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