In testimony before the House Subcommittee on Government Operations, Postmaster General David Steiner revealed that the Postal Service was in bad financial shape and at risk of running out of money within the year. This was shocking to…well, to no one, but he did illustrate the problems well. Whereas the previous PMG, the inimitable Louis DeJoy, used bats and geese in his analogies, Mr. Steiner preferred a more nautical theme – anchors. Congressional mandates to deliver mail six days a week, keep all Post Offices open, regardless of profitability, and prepay retirement and workers' comp funds, while being strictly limited in how much it can raise its rates, are the components that make up said anchor. The sea that this anchor is sailing on, or, rather, sinking in, is mail volume that has dropped about 50% since 2007, while delivery points continue to grow.
How to resolve this “crisis” was detailed in a number of steps – most quite unappealing. (I place crisis in quotes because this has been developing for years and is akin to me gaining a lot of weight over the years. I suppose I’m fat now, but I saw it coming. Calling it a crisis would be a bit dramatic. I suppose I should be taking a lot of steps, too.) My physical fitness aside, these are some of the possible actions suggested by the Postmaster General:
- Reduce the number of delivery days to something less than six.
- Be allowed to raise prices as often and as much as required, without the burden of a regulator. He alluded to a ninety-five-cent First-Class stamp.
- Be allowed to ship alcohol as UPS and FedEx are.
- Be allowed to close unproductive post offices as needed.
- Remove requirements to prefund retirement.
- Increase the borrowing authority of the Postal Service from its current $15 billion.
There you have it- do those things and the Postal Service will be right as rain.
Of course, he had come to the right place, as all of the actions above require congressional approval. And Members of Congress are always delighted to support legislation that may reduce services to every single one of their constituents. It was also interesting to note that the PMG never discussed the union contracts that generate most of the costs of the Postal Service – there was no talk of right-sizing the workforce. It seems that Postal Service employees are very good about voting and are conveniently distributed in every congressional district.
So, what is likely to come of all this? How do we address this crisis?
- They’ve tried limiting service days before. There was a whole Postal Forum in San Diego a few years ago that spoke of little else. Detailed plans were in place to eliminate a day of delivery. But Congress would not let them pull the trigger. It is hard to imagine that this year’s Congress is any bolder.
- Aunt Minnie doesn’t like paying more for her stamps, not to mention a direct mail industry that fuels trillions of dollars of commerce. Of course, we’ll see some increases, but they are unlikely to boot the regulator or make significant changes.
- As far as shipping me my wine? Seems benign, but does require congressional action. Depends on how well UPS and FedEx lobby. And anything that requires congressional action requires, well, action. Not something they like doing.
- Be allowed to close unproductive post offices? Heavens no! Someone will complain.
- Prefunding requirements? USPS doesn’t generally pay them anyway, so that problem has been solved.
- Increase borrowing authority? Bingo! Give them a few bucks to tide them over and let them come back and complain to the next congress. “Where’s the checkbook?”
Of course, if they are allowed to borrow more, they must demonstrate their ability to pay it back. HAHA. I made a little joke there. The Postal Service does not pay things back.
So, what is really likely to occur? It’s almost certain that USPS will get enough borrowing authority to at least get them through the election, so campaign mail can be sent out. They may get a little more rate authority, too, but not enough to do much.
The net effect of loaning the Postal Service money with no real expectation of being paid back is that taxpayers are helping fund the Postal Service – and that is not unfair. Mr. Steiner’s list is not incorrect. The people really do want all that stuff – 6-day delivery, local post offices to hang out at, and modest rate increases. And today’s Postal Service does a spectacular job of delivering them at what really is a fair rate. A bargain.
But someone does need to pay for it. Why not the public that demands it?