Can Congress deliver mail Rx?
On Monday, Democrats in Congress introduced legislation that would give the U.S. Postal Service an additional three months to figure out how it will make a $5 billion payment to a fund for its future retirees.
Such an extension would be a temporary tourniquet on an organization that is hemorrhaging money. The Postal Service is expected to lose $10 billion this fiscal year, and Postmaster General Patrick Donahoe told congressional leaders last week that the agency is “at the brink of default.”
Many of the Postal Service’s problems can be laid at the doorstep of Congress. For instance, the requirement that the agency pay $5 billion each year to prefund the future retirement of postal workers was established in a law passed by Congress in 2006.
Several of the sponsors of that 2006 legislation are now cosponsors of the measure to give the Postal Service an additional 90 days to meet that funding commitment, according to The Washington Post. But they aren’t proposing to eliminate the requirement, which — according to one of the 2006 bill sponsors quoted by the Post — places burdens on the Postal Service “that no other agency or organization must meet.”
Furthermore, Congress decided in the late 1970s that taxpayer subsidies to the agency should be eliminated and what was once known as the Post Office should become a semi-private, self-supporting entity.
However, Congress has refused to allow the Postal Service to truly act like a private, self-supporting business. It has made it difficult for the organization to cut costly services, such as Saturday delivery, or close outlying post offices.
No private company could stay afloat if it was prohibited from taking sensible measures to cut costs when economic conditions warrant it.
Even so, the Postal Service might have handled those issues without significant financial problems if conditions had remained as they were in the late 1970s, when the organization had a virtual monopoly on most forms of mail. But, that’s obviously not the case today, and we should celebrate that fact. The free-market system has developed an amazing variety of products and technologies that compete with old-fashioned snail mail. Faxes, email, online banking and payment services all offer consumers new, convenient ways of communicating and conducting business.
Private package carriers such as Fed Ex, UPS and a host of smaller, more localized delivery services, offer economical and efficient competition to the Postal Service on package deliveries.
In this environment, raising the cost of postage, instead of significantly improving the finances of the Postal Service, actually drives consumers to seek alternate methods of communication.
The U.S. Constitution gives Congress the authority “To establish Post Offices and post Roads.” One could argue that Congress met that responsibility long ago, and there is nothing in the Constitution saying post offices must be maintained in perpetuity.
The Postal Service and Amtrak are both models of failed, quasi-governmental, sort-of-private entities. Neither can maintain self-sufficiency under current rules.
If Congress wants the Postal Service to survive without massive infusions of tax money, it must let the organization operate like a truly private business that can make rational decisions to cut costs.
Either that, or Congress and the American people should prepare for the day when the U.S. Postal Service is nothing more than a historical artifact.