08.14.2013 0

Congress going postal, again

uspsBy Rick Manning

The United States Postal Service is expecting to run out of cash again – real soon.

After the loss of another $740 million in the past quarter, and $3.9 billion over the course of the current financial year, post office watchers are predicting that the cash to run the quasi-government agency could run out in October.

Just add this impending crash to the must-resolve problems waiting for Congress when they return from their traditional August recess.

On the House side, House Government Oversight and Reform Chairman Darrell Issa has passed Postal Reform legislation through his Committee that awaits floor action.

With this action, the clock is ticking, and the problems are multi-fold.

First class mail usage is down by more than half in the past decade, and increasing rates have only served to discourage use of the mail further.  Supplanted by email, texting, online banking and social media, the Constitutionally mandated Post Office is struggling to find its identity in a 21st century world.

A struggle which is made virtually impossible due to legal restrictions which the USPS uniquely faces due to its quasi-government status and the need to get Congress to act to make adapting structural changes that other businesses take for granted.

USPS chief financial officer Joe Corbett contends in an article in Post and Parcel that, “We need to make fundamental changes to the way we currently do business, changes that are part of our Five-Year Business Plan.”

“However, without comprehensive postal reform legislation signed into law, our hands are tied and we expect multi-billion dollar annual losses to continue.”

Postmaster General Patrick Donahoe argues for the bold step of withdrawing from the Federal Employees Health Benefits Program and negotiating a new less costly plan with the union noting, “An astonishing 20 cents of every revenue dollar the Postal Service takes in must go toward health care costs.”

In fact, the significantly underfunded retiree health system is at the heart of the current shortfall facing the Postal Service.   The situation got so bad that in 2006 Congress mandated that the USPS must fully fund its retiree health plans through ten catch up annual expenditures of $5.5 billion through 2017.

This spending mandate was necessitated by a recognition that taxpayers would likely be on the hook for bailing out the generous postal worker retiree health system due to past decisions by the USPS to not fund this obligation.

The question of whether to force the USPS to continue putting the money in the bank to fund retiree health benefits or not is likely to generate the most controversy when both a House and Senate version of Postal Reform hit the floor.

A Senate bill by Senator Tom Carper of Delaware would rescind the pre-funding requirement and tinker along the edges of reforming the system, essentially kicking the can on the controversy down the road to another Congress.

The Issa legislation leaves the pre-funding requirement in place and incorporates the flexibility for the USPS to make changes that reflect the dynamic marketplace in which they compete.

One of the things that American’s take for granted is the walk out to the mail box to see what has arrived, a check, bills, a favorite catalog, a letter from a loved one, or even opportunities to save money on your car insurance.  This “mail moment” has been imbedded in our American psyches almost from birth.

However, the world is changing, and it is time for Congress to get out of the way and allow the Post Office to change with it.  If they cannot do that, then perhaps it is time to emulate the trend of privatizing postal systems that is sweeping throughout the European continent.   Perhaps it is time  a constitutional amendment that cuts Ben Franklin’s beloved post office out of the constitution, and get Congress out of the postal business altogether.

Rick Manning (@rmanning957) is the Vice President of Communications and Public Policy for Americans for Limited Government.

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