The USPS is supposed to operate like a business by relying on the revenues from the sale of postal products to cover costs. Congress makes that harder by imposing various obligations and stifling attempts to reduce costs. Add in a weak economy, the growth in alternative forms of communication, and a predominantly unionized workforce that has secured excessive compensation and privileges and the result is a financial mess.
The Senate will soon consider a postal reform bill that is supposed to save the USPS: “The 21st Century Postal Service Act of 2011.” That’s a mighty peculiar title considering that the legislation would keep the U.S. Postal Service stuck in the 20th century. It’s also an overly-confident title as there’s zero chance that the legislation would enable the USPS to “flourish” into the 21st century as Sen. Joe Lieberman (I-CT) claims.
I’m not going to go through all of the bill’s particulars (interested readers can view the committee’s summary here). The bottom line is that the bill does nothing to alleviate the USPS from the burden of congressional micromanagement. For example, one provision prevents the mere possibility of eliminating Saturday service for two more years. Talk about kicking the can down the road. For those who are perplexed by our enlightened leaders’ inability to reach a deal on deficit reduction, consider what this provision implies about their ability to oversee the government’s mail operation.
In the long term, either the USPS is going to be privatized or it’s going to go back to relying on taxpayer subsidies. Fortunately, a taxpayer bailout is off the table for now. However, taxpayers might not be so lucky the next time Congress steps in to “fix” a mess that is largely of its own doing. In fact, the continuing failure to think outside the box, which the Senate bill is a perfect example of, only increases the likelihood of government mail going on the dole.
See this Cato essay for more the U.S. Postal Service and privatization.