Congress should let U.S. Postal Service cut costs, adapt, compete
A few months ago, the U.S. Postal Service, responding to its $16 billion loss for 2012 and predictions of more red ink, announced a plan to end Saturday delivery in August. Packages would continue to be delivered on Saturdays, but regular mail would stop. It was a modest and reasonable step that was projected to save the USPS about $2 billion a year.
Most Americans accepted the change, noting it would have little impact on their lives. The Postal Service’s plan to end Saturday delivery in August sounded like a reasonable reaction to a world in which more and more people are paying bills online and sending e-mails rather than letters that require a stamp.
There were other common- sense changes that enjoyed broad support, like ending the requirement that the USPS prepay the medical costs of future retirees — something Congress does not require of any other governmental agency. Eliminating that burden would have reduced the postal service’s 2012 losses by $5.5. billion.
Yet last week, the USPS announced it was giving up on its effort to end Saturday delivery. Most people assumed that was because Congress, in its dysfunctional state, failed to give the USPS the authority to make the change.
As bad as that would have been, the real reason is worse. Instead of approving the common-sense change, Congress passed legislation prohibiting the USPS from ending Saturday delivery.
So instead of letting the Postal Service reduce its costs in a way most people support, Congress blocked that and guaranteed further staggering losses.
Congress reportedly blocked the Postal Service from trimming its losses by ending Saturday delivery because unions representing postal employees applied political pressure.
The Postal Service is in a tough situation, but Congress makes it worse. Mail volume has declined as e-mails replace letters and millions of people like the convenience of paying bills electronically. And those revenue hits came after Federal Express and UPS captured a profitable part of the parcel business from the Postal Service.
Congress requires the USPS to be financially self-sufficient, meaning it does not receive tax dollars. But Congress also won’t let the USPS adapt or compete. If last year’s loss of $16 billion is an indicator of sustainability, taxpayers could eventually be on the hook for a bailout.
Congress again demonstrates that it cannot do the most obvious, common-sense things — if there is any political opposition.
The Los Angeles Times noted that the unions objected to dropping Saturday delivery because it would threaten jobs. The Times’ editorial noted that “the Postal Service’s primary purpose isn’t to serve as an employment agency.” Does Congress realize that?
Congress should get out of the way and let the Postal Service adapt and compete, as national postal services in most European countries have been doing successfully for years.
Ending Saturday delivery is a logical first step to trimming losses. Another would be for Congress to eliminate the mandate requiring prepayment of retiree health care costs.
In addition to ending Saturday delivery, the Postal Service should roll back the subsidies it gives to junk mail and charge rates based on actual costs.
Other changes are in order, but until Congress takes the handcuffs off the Postal Service, the losses will only grow.
