Congress Needs to Help Reform US Postal Service
Congress should be productive in the effort to reform the U.S. Postal Service (USPS) after providing billions in aid over the past year. There are obvious structural problems at the Postal Service that can only be addressed by Congress. Postmaster General Louis DeJoy is asking for Congress to help him reform an institution that lost $10 billon last year with more losses expected in the future.
The U.S. Postal Service (USPS) is experiencing a slow death according to its Chairman of the Board. The Wall Street Journal reported on April 26, 2021, that “since 2006 total mail volume is down 39%. There’s less mail than in 1984. Yet the number of delivery points rises by more than a million a year. Put differently, the USPS says in 2006 there were 5.6 daily pieces of mail per delivery point. Last year: three. By 2030 the estimate is 1.7.” According to reports and documents made public by the USPS, losses since 2007 equal about $87 billion and the next decade projects about $160 billion in losses. The current business model for the Postal Service is unsustainable.
The record of the USPS indicates a need for comprehensive structural reforms. According to Postmaster General DeJoy’s testimony before Congress on February 24, 2021, the Postal Service had 14 consecutive years of net losses, including $15.9 billion in 2012 and $9.2 last year. The last year that the postal service turned a profit was in 2006 with a meager 900 million collected over what they spent. When you consider that just last year, Congress gave the mail carrier institution $10 billion, of which, they spent $8.6 billion and refused requests from Congress to disclose how they were spending this taxpayer cash.
The fact is that there is a plan that has been unveiled by the USPS leadership to reform the institution. This plan includes some good ones and some that will not improve service. The ten-year plan includes the good idea of imposing some price flexibility to allow packages delivery to be priced in a way that is not a de facto subsidy to large online merchants. One bad idea is to merely dump retirees into Medicare to take some of those costs off the books of the USPS and shift them over to another insolvent institution.
The postal service also needs to look at some odd decision making that clearly offends traditional business practices, like the one to use mules to deliver some mail into the Grand Canyon. They do this 6 day a week and it is a 9-mile hike for the Mules to get mail into the Supai Post Office in Arizona. This is a case study in waste of taxpayer cash and why the idea of “universal service” flies in the face of sound business practice.
The idea that the postal service should continue six-day delivery is ridiculous. Congress can change that. The target that letters should arrive in three days needs to be changed for ones travelling across the nation. An extension of that deadline would save taxpayer cash and bring the USPS closer to solvency. Flexibility in pricing needs to be part of any Congressional solution and the price of stamps may have to go up, unless if the postal service can figure out a way to allow for higher prices for delivery to more difficult areas. For example, the price of a check being mailed from one end of Phoenix, Arizona to the other side of the city should be priced lower than one from Maine that ends up being carted by a mule into the Grand Canyon so it can get there in three days.
One burning question is whether we need a USPS monopoly on the delivery of mail. We likely will need some backstop for mail, but we do not need a fully functioning postal service when the private sector can handle much of these responsibilities.
Reform is in the eye of the beholder sometimes, because many left leaning Members of Congress would prefer to throw money at the problem with more bailouts, loans and shifting of retiree’s costs as a means to make the USPS’s books look better. A better idea would be to reform the institution to make it look more like a business. The end result may be the end of $10 billion a year loss for the taxpayer if Congress can get reform right.
Lynn Haueter served as Deputy Chief of Staff to Congressman Ron Estes-R Kansas and Executive Assistant to Ways and Means Ranking Member Congressman Kevin Brady-R Texas, as well as advising other Members of Congress. Haueter has a Master’s degree in education, served as Chair of an international non-profit educational foundation, and taught in both the public and private sectors.
