The United States Postal Service lost $8 billion last year.
To put that in perspective that is $25 for every man woman and child in this country.
Congress - as usual - created part of the problem. They set up the “independent” Postal Service in 1971. Then five years ago Congress decreed the Postal Service has to pay $5.5 billion into a fund created to pay for the medical benefits of retired postal workers in future years. It is an albatross around the Postal Service’s neck that no other federal agency has weighing it down.
Without that stipulation, the Postal Service would have lost $2.5 billion last year or $7.80 for every American.
So why not relax the medical benefit requirement? There are two reasons. First, it is a payment to “the government” which means politicians can count it as a $5.5 billion reduction of the national debt. The other is even more cynical. It would be an outright admission by members of Congress that the generosity of the federal government to its employees - Postal Service or otherwise - isn’t sustainable especially when it comes to retirement and health benefits.
The Postal Service sticks out like a sore thumb due to its accounting as an “independent” agency. While state and city governments along with the private sector and school districts have either passed on higher health care premium and retirement costs to workers, the federal government has not.
It is a house of cards ready to collapse the second the federal currency printing presses run out of ink.
So what is the solution?
First suspend the Postal Regulatory Commission’s oversight power on rate increases for five years. Hold any payment to future medical benefits of retirees in abeyance for the same time frame.
Then tell the Postal Service management and union leaders the clock is ticking with only two conditions: During the five-year period, six-day residential delivery service must be retained and no post offices per se can close although distribution facilities can be closed.
The Postal Service would be free to enter any other type of business they wish to pursue new sources of income. However, the best course would be to raise the price of their service while seeking even more efficiencies and manpower reductions.
The first-class mail rates are going up a penny Jan. 22 to 45 cents. Big deal. Mail 10 letters a month that comes to an extra 10 cents. Do something more bold. American’s postal rates are among the lowest on the planet. Take first-class up 25 cents. That would be $2.50 more a month.
At the same time take junk mail costs up 25 percent instead of the 2.1 percent it is scheduled to increase in early 2012.
If it cuts back volume drastically and shrinks revenue, so be it. You will have your answer whether people -from those using first-class mail to mega corporations flooding mailboxes with junk mail-value the Postal Service enough to actually support it.
It is painfully obvious that the current financial status of the Postal Service can’t be sustained for much longer.
If at the end of five years the $2.5 billion gap hasn’t been closed and a set aside of at least $2.5 billion toward an annual payment to the retiree medical fund can’t be made on an annual basis, let the chain saws roar. If after five years you have to cut delivery down to three days a week so universal mail delivery can still be maintained, then that is what has to be done.
After 30 years of Congress giving lip service to the concept of an independent mail delivery organization, they need to give the Postal Service a fighting chance to stay afloat in one form or another.