The Postman Always Defaults Twice


Monday October 1st, 2012   •   Posted by K. Lloyd Billingsley at 12:30pm PDT   •  

The U.S. Postal Service (USPS) recently defaulted on a $5.6 billion mandate to pre-fund retiree health benefits, the second time in two months the federal government postal “service,” has failed to deliver. In August it failed to make a $5.5 billion retirement prepayment slated for last September, which Congress conveniently deferred. So the USPS is a certified deadbeat and also a big-time loser. 

In the third quarter of the most recent fiscal year the USPS lost $5.2 billion a full $2.1 billion more than the same quarter in 2011. From 2007 to 2010, the USPS lost $20 billion. A major cause of the losses is the decline in first-class mail, its major revenue source, and in which it holds a government-mandated monopoly. That monopoly cannot prevent individuals and businesses from turning to electronic communications. Since 2001, the volume of first-class mail has fallen 19 percent and by some projections will fall another 37 percent by 2020, a return to the levels of 1986. But the USPS is not only a loser. It is also decidedly Luddite.

Its plan to expand revenues calls for businesses to send more junk mail so unionized postal workers, who make 15-20 percent more than comparable workers outside government, will have more to do. The plan is called “Every Door Direct Mail,” and USPS bosses claim that by 2016 it “could be a billion dollar product.” Maybe so, but that would not begin to offset the massive losses.

The USPS wants to stop Saturday delivery, raise postal rates, and even lose some employees. Good luck with that because like all government employees postal workers also vote for a living. A better plan would be to lift the monopoly on first-class mail and privatize the service. The USPS already competes with FedEx and UPS in shipping, where USPS business is up 9 percent.

Expensive, inefficient, massively in debt, and more concerned about employees than customers, the postal service is a fitting symbol for the federal government. On the other hand, the USPS at least gives some clue what government health care will look like. But maybe we shouldn’t be too hard on the USPS. After all, as Jay Leno says, for less than 50 cents they will carry a first-class letter all over the country for weeks. That works out to just pennies a day.




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