Trim overhead and match postal reforms to financial reality
Congress and the Postal Service know the path ahead for ending massive deficits. Stop expensive prepayments for employee health benefits and close facilities as postal use plunges.
Seattle Times Editorial
OVERDUE financial reforms for the U.S. Postal Service should be a priority delivery. They should not include new sources of revenue that directly compete with existing businesses.
Congress is wrestling with how to staunch the losses at the Postal Service without dramatic changes. It is wishful thinking in the face of plunging mail volumes, stunning employee overhead and yet another quarterly loss, this one at $3.3 billion.
Postmaster General Patrick Donahue is proposing a five-year cost-cutting plan that has lawmakers from rural districts in a panic. The ideas represent a no-nonsense effort to save more than $6 billion a year by closing 252 mail-processing centers and 3,700 post offices. More than 100,000 jobs would be lost.
Included in Donahue's proposal, which was restated last week in a letter to Congress, is an end to Saturday service, slower delivery and a nickel increase in postage to 50 cents for a first-class stamp.
A five-day delivery schedule might be more shocking if America's reliance on the mail system had not been so thoroughly swamped by the Internet in recent years.
Congress is of two minds, and the stalling is costing a bundle. Sen. Joe Lieberman, I-Conn., has Senate Bill 1789, which follows the closure template, but is considered an improvement. Bipartisan resistance is growing. In part the protests are over first-class service bumping down to three-day delivery. At the core, however, are rural jobs and the cultural role of local post offices.
Rep. Darrell Issa, R-Calif., has HR 2309, which also promotes five-day delivery, and would gradually eliminate discounts for nonprofits and their direct-mail campaigns. He has resisted a key change that others argue could make the Postal Service marginally profitable: changes to employee benefits systems.
The postmaster general and others want to eliminate annual $5.5 billion prepayments to retiree health-benefit plans. They also want access to a nearly $7 billion overpayment to the federal pension system.
Some basic changes need to be made, and other ideas avoided. Postal subsidies for advertising make life difficult for private competitors. Do not compound the financial insult. Deliver the mail and get out of the advertising business. One wacky proposal is to put ads on mail-delivery trucks.
The Postal Service does not need to go into the wine and spirits delivery business. Others have that covered. Other desperate proposals would have the Postal Service collaborating with local and state government to take on tasks like selling fishing and hunting licenses.
Stay focused on mail delivery. Make postmarks count, so bill payers do not suffer late fees with slow delivery. In that same spirit, do not compromise mail ballots with tardy delivery. Again, make postmarks count.
The first savings is ending the massive prepayments on future health benefits, then making sure the mail is delivered. The combination yields predictions of profitability.