Collapsing U.S. Postal Service Needs Freedom to Cut Costsby
Like a Pony Express rider wobbling toward Fort Laramie with an arrow in his hat, the Senate bill passed last week to reform the U.S. Postal Service is far from its goal and facing attack from all sides.
The ambush -- led by House Republicans, postal-worker unions and the service itself -- seems overly aggressive: The bill is Congress’s first earnest attempt to stop the impending meltdown of the Postal Service, which loses $25 million a day and says it might have to close thousands of post offices and hundreds of distribution centers in the next few months. The legislation also gets several issues right. First, it would revise payment schedules to two federal-worker retirement funds, allowing the service to offer retirement incentives and trim the workforce by 100,000 jobs.
Encouragingly, the bill would also require arbitrators in future labor negotiations to take the USPS’s overall fiscal condition into consideration. It would enhance revenue slightly by allowing the USPS to raise some postal rates, ship wine and beer, and sell things like fishing licenses.
The bill has some weaknesses, especially when it comes to tying the USPS’s hands in . It would forbid the elimination of Saturday delivery for two years, which is two years too long to wait. It would make it tough for the service to close many of the 461 mail-processing plants that are no longer necessary given that first-class mail volume has dropped by nearly 30 percent in a decade. It would move toward giving communities de facto veto power over the closing of local post offices. Clearly, mass-mailers and senators with home-state interests had too much sway.
Postmaster General Patrick Donahoe says that the bill gets in the way of his five-year plan to achieve $20 billion in savings by 2015, and that without changes he will “be back before the Congress within a few years requesting additional legislative reform.” And by that, he means with hat in hand.
The leading House proposal builds on the Senate approach while being looser and stricter in the appropriate places. It would speed up the timeline for eliminating Saturday delivery and closing superfluous processing plants, bar no-layoff clauses in future contracts, and make needed reforms in health-care costs. It also calls for a commission to shutter branches similar to the one the military uses to close its bases.
Even in the age of e-mail, postal delivery is a necessary part of the U.S. economy and social fabric. But the Postal Service can’t continue to hemorrhage money, and taxpayers shouldn’t have to bail it out. Give the Senate credit for setting things in motion, but it’s going to take tougher measures in the House to get the USPS on the route to long-term solvency.
To contact the senior editor responsible for Bloomberg View’s editorials: David Shipley at email@example.com .