Cutting USPS Loose

After spending quite a bit of time complaining that the post office is losing money (partially because they are being forced to actually fund their pensions like a regular business), Congress has turned a quick about face:

A spending measure passed by the House on Wednesday to keep the government operating through September requires that the Postal Service maintain a six-day mail delivery schedule, a potential setback for the agency, which announced last month that it planned go to five-day deliveries to cut costs.

Faced with billions of dollars in losses, Postal Service officials said last month that beginning in August the service would stop delivering mail on Saturdays, though it would continue to deliver packages on a six-day schedule. The agency said cutting Saturday delivery would save about $2 billion a year.

The agency lost about $15.9 billion last year, partly the a result of a 2006 law requiring it to pay about $5.5 billion into a health benefits fund for its future retirees. A drop in mail volume has also hurt the agency’s finances.

Congress also wants to prevent the closure of seldom-used rural post offices.

Look, there is no magical efficiency engine that the Post Office can kick to make the system work. Either they massively raise postal rates or they cut services or we continue to pour billions of dollars into them. It’s possible — possible — that a massive overhaul of the system would make everything work. But given the maze of regulations and existing contracts, such massive reform is almost impossible. And it would certainly not work with six-day delivery and thousands of rural post offices. And if you think Congress is interfering now, just wait to see what they would do if USPS tried to change union contracts.

(If you want some amusement, throw these facts onto a liberal blog and read all the ensuing comments about how the postal service connects us all to each other like some kind of national psychic mucus. Even if you go in for such woozy sentiments … that was not the intention of the post office.)

The alternative to letting the Post Office cut services is allowing private companies to compete with them. While this ideas has its merits, it would only make the situation with USPS itself worse. Private companies would instantly slurp up the most profitable parts of the business leaving USPS — tied down by federal regulations and union contracts — to become an even purer money hole. You could, of course, then allow USPS to sink completely below the waves. But that would leave the government, by federal law, on the hook for their pensions and leave rural areas either cut off or paying gigantic postal rates. And that’s leaving out the thorny Constitutional issue that Congress is mandated to establish post offices and post roads.

In any case, those are the choices: privatization with the problems it entails, continued massive subsidies or curtailing of services. There is no other alternative.

But Congress has never felt particularly bound by the laws of mathematics. They want a monopoly Post Office that delivers everywhere six days a week at current prices but doesn’t lose any money. They might as well wish for a postal service run by unicorns.

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  1. Miguelito

    I’m starting to think the USPS is a good view into what healthcare (really, health insurance) is going to do. Have the gov’t just put on plenty of regulations that essentially make it impossible to operate in any sane business fashion, and eventually it’ll crumble.

    You know, one could argue that the constitutional requirements could be met using technology like email. I mean, if they can argue that, originally a land line phone and now even cell phones are important enough to essentially give away taxpayer funded ones, who’s to say you can’t have post offices with public computer terminals? Dump the daily delivery completely. Even just requiring people to travel to their nearest post office vs having door to door delivery could cut the USPS workforce big time.

    Back in NH where relatives have a cabin on Lake Sunapee, there wasn’t delivery until about 15 years ago. Before that, we had to go get the mail from the post office periodically, which was inside a general store at the time. I knew people from Bethel Alaska when I was a HS Sr (CloseUp trip to DC) and they said we could just mail them at the town itself because they all got their mail from the post office anyway, no delivery. Drop home deliveries and nix the junk mail we all throw out anyway and any real storage issues would shrink to nearly nothing.

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  2. AlexInCT

    I’m starting to think the USPS is a good view into what healthcare (really, health insurance) is going to do.

    I pointed this out over 2 decades ago when they tried to do the first government take over attempt of healthcare during the Clinton tenure, Miguelito. No matter how well intentioned, when government gets at it, it turns into a giant clusterfuck. And that’s by design. Government’s main, primary, and most important directive is to grow itself, its influence, and dependency (if you need proof watch the left’s reaction to the sequestration cuts that amount to all of a fraction of a percent of the government’s bloated and wasteful social engineering and vote buying budget) on the mediocre to horrible services provided.

    The healthcare takeover has never been about better healthcare, less expensive healthcare, or even access for everyone to healthcare. Anyone telling you that’s why government should own healthcare is a lying fuck. It’s about government getting its grubby hands on the money and decision making process, primarily so they control who gets what so they can use it to control people. And for the idiot masses that go along with this power grab, it has been to prevent “evil korporshuns” from making a damned profit. There is a reason that government excuses its people – government employees, their political donors and friends, especially the big unions, and other well connected entities – from having to participate in these monstrosities they foist upon the rest of us.

    The people that think profits are evil and nobody should ever be allowed to make profits and deny “free anything” to anyone (unless it is government doing the denying, of course) are responsible for most of the growth of the stupid in today’s world.

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  3. Hal_10000 *

    I agree on the Post Office as a model of govt healthcare. In fact, that was the rhetoric used to defeat Hillarycare 20 years ago. It’s not just us being ornery though. Congress has *already* shown their willingness to screw around with medicine. When research showed that yearly mammograms may be unnecessary for most women, they immediately passed a law mandating coverage. Now we’ve got the birth control thing. Congress’s behavior with the post office — do everything we want for less than it costs — is a perfect example of how they see healthcare.

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