No, the U.S. Postal Service won’t close on August 1st because it can’t afford to make a required $5.5 billion payment into a federal fund for postal retiree health benefits. Yes, the entire situation with the USPS is a mess. But when you have politicians ultimately trying to run a commercial operation, constant clean ups in aisle four are to be expected.

First-class mail is the USPS’s most profitable product. Thus, the large – and permanent – drop in first-class mail volume has the USPS facing red ink as far as the eye can see. The U.S. Postal Service’s inspector general recently reported its findings from focus group discussions held with high-volume first-class mailers and mail service providers. The feedback is quite telling:

The postal reform bill passed in the Senate last week is further evidence that politicians shouldn’t be entrusted with running a hotdog stand, let alone the nation’s mail. The U.S. Postal Service is supposed to operate like a business, but congressional micromanagement makes that impossible. Nevertheless, 62 senators voted for an eye-glazing 191-page bill that would keep Congress’s hand placed firmly around the USPS’s neck.

This morning I discussed rural America's resistance to downsizing the U.S. Postal Service with Stuart Varney on the Fox Business Channel:

While Congress is busy trying to figure out how it’s going to continue screwing up the U.S. Postal Service, postal expert Michael Schuler has been busy analyzing the reasons why it’s so screwed up to begin with. Last week, Michael released a paper on congressional micromanagement of the USPS. A new paper looks at the complicated and controversial topic of postal retiree health benefits.

Postal expert Michael Schuyler has released a follow-up to his January paper that compared the recent financial performance of the U.S. Postal Service to foreign postal service providers. Not surprisingly, the USPS has fared relatively poorly in comparison to its foreign counterparts. In his new paper, Schuyler looks at the role government micromanagement plays and finds that “Foreign posts have much more flexibility than USPS to adjust operations to keep costs in line with revenue.”

The U.S. Postal Service has released a new five-year plan for congressional consideration that it says would get the beleaguered government mail monopoly on sounder financial footing and thus avoid a taxpayer bailout. The plan repeats previous suggestions (i.e., workforce reductions, postal network consolidations, elimination of Saturday delivery, elimination of the retiree healthcare benefit funding requirement) and proposes an increase in the price of a first-class stamp from forty-five to fifty cents.

A new paper from postal expert Michael Schuyler compares the financial performance of the U.S. Postal Service to foreign postal service providers. Not surprisingly, the USPS, which has lost over $25 billion since 2006 and ranks near the bottom of the Postal Index of Freedom, doesn’t fare too well.