In Our View: Reform Post Office
Huge financial problems cannot be ignored; several solutions are available
Tuesday, September 13, 2011
First, the good news, two pieces, to be exact: The United States Postal Service receives no tax money for its operations. Furthermore, “We do not want taxpayer money,” Postmaster General Patrick Donahoe recently told the Senate Homeland Security and Governmental Affairs Committee.
You’re probably thinking: Gosh, this would be a good place to end an editorial. Right?
Sorry, but here’s the bad news: The Postal Service is on “the brink of default,” Donahoe also said, and “we have to get our finances in order.”
Boy, do they ever. Last year the post office lost more than $8 billion, and it wasn’t for lack of trying to make things better. The U.S. Postal Service has cut 110,000 jobs in the past four years, and numerous post offices in small cities have been closed.
If things don’t get better soon — precisely, by Sept. 30 — Donahoe said the agency “will default on a mandated $5.5 billion payment to the Treasury.”
This is not the first editorial we’ve published advocating reform of the Postal Service, because the problem has been growing for many years. Everyone knows the main culprit: email. But “culprit” carries a negative connotation when, in fact, email is a triumph of modern technology. Neither email nor the post office is good or bad, the former is just more modern than the latter. Reform will not come easily, though, because the Postal Service certainly has tradition on its side: more than two centuries of reliable mail delivery. And there’s also the size factor: The post office supports a $1.1 trillion industry that employs more than 8 million people in direct mail, periodicals, catalogs, financial services and other businesses.
But there’s no ignoring the financial challenge. Fortunately, numerous remedies are available. Until now, the most common solution has been to increase rates for mail service, but the post office has reached the point where further rate increases will only hasten the customers’ flight to email.
One solution mentioned more often these days is to cut mail delivery to five days, Monday through Friday. There’s also talk about closing more post offices, which makes sense. In fact, the Postal Service wants to close 3,700 more outlets and reduce the workforce by up to 220,000 workers, but that will take courage on the part of congressional representatives who will get besieged with complaints from constituents. And along comes that same predictable problem that accompanies agencies dealing with public-employee unions: Most contracts strictly limit layoffs. All the more reason for agency officials to get more realistic — and tougher — in future contract negotiations.
Donahoe and other USPS officials also suggest withdrawing from the federal retirement system and setting up the agency’s own retirement program. And a Washington Post story reports the post office could save about $1.5 billion by adding one day to the current guarantee that first-class mail will be delivered in one to three days. Another $1.1 billion could be saved by delivering some long-haul mail by ground instead of by air. Many who would be bothered by that change likely have already shifted to email.
The conversion by the public to email is accelerating. First-class mail volume is expected to be about 50 billion pieces in 2020, down from 78 billion last year. Although no taxpayer dollars are involved, Congress must authorize the changes. If those politicians want to keep the Postal Service solvent, they really have no choice.