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Columbus
Dispatch...
Congress
should act
Without lawmakers’ OK for reforms,
Postal Service can’t make ends meet
September 26, 2011
The
U.S. Postal Service faces huge
barriers to solvency, with a service that has been profoundly
undermined by competition
and labor agreements that bloat its costs. But it remains too important
to
allow it to slide into default, as officials suggest could happen as
early as
this winter.
Instead,
the Postal Service will have
to change radically to survive, but it can’t do that without
intervention from
Congress. Feuding partisans in that institution should come together to
find a
solution.
So
far, at least two bills have been
introduced. One from Reps. Darrell Issa, R-Calif., and Dennis Ross,
R-Fla.,
would make deep cuts in postal services. Another, sponsored by
Democratic Reps.
Elijah E. Cummings of Maryland and Stephen F. Lynch of Massachusetts,
aims to
return the Postal Service to profitability by allowing it to branch
into new
services.
As
omnipresent as email, social media
and Internet shopping are in American life, millions of people still
count on
being able to mail an actual paper letter for 44 cents, not to mention
receiving deliveries to their front doors six days a week. People in
rural
areas depend on the post office to deliver prescriptions, newspapers
and other
essentials.
The
service is teetering on the edge
of fiscal disaster, with an operating deficit that will reach $9.2
billion this
year. It won’t be able to make a $5.5 billion payment on retirees’
future
health care, due on Sept. 30. If things don’t change, by early next
year it
could find itself with no money to pay employees or put gasoline in
trucks.
The
problem stems from two directions.
The rise of email, online bill-paying and online catalog shopping have
taken
away a huge source of postal revenue. The service will handle about 167
billion
pieces of mail this year, down 22 percent from five years ago.
Projections
suggest that could drop to 118 billion pieces by 2020. On the cost
side, the Postal
Service is burdened by labor contracts that are generous even by
public-employee standards. As a result, labor costs eat up 80 percent
of the
Postal Service budget, compared with 53 percent at United Parcel
Service and 32
percent at FedEx. No wonder it can’t compete.
Some
post-office supporters also say
that it is unreasonably burdened by a 2006 law requiring it to pre-fund
75
years’ worth of current and future retiree health benefits over a
10-year
period.
The
changes advocated by Postmaster
General Patrick R. Donahoe — laying off 120,000 workers, reducing pay
and
benefits, cutting Saturday delivery and closing 3,200 lesser-used post
offices,
to name four of the most unpopular — will require political courage,
because
they go against union contracts and upset voters around the country.
Postal
officials have other
moneymaking or moneysaving ideas that would be less controversial, such
as
allowing the postal service to expand its offerings by having banks in
post
offices, delivering wine and beer and allowing ads on postal trucks.
Others
have suggested making up for the loss of closed offices by offering
some postal
services in grocery stores or other establishments.
With
some creative restructuring, the
Postal Service could evolve into a very different agency, while still
providing
the essential delivery service to those Americans who want and need it.
But
the Postal Service won’t survive
without the painful rightsizing that the rise of the Internet has made
necessary. And it can’t make needed changes without approval from
Congress.
Read
it at the Columbus Dispatch
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