As Josh Hicks reports in the Washington Post, the U.S. Postal Service lost $1.9 billion in the second quarter, and the losses come despite increases in revenues, higher prices for stamps, and a boost in USPS package shipping. The losses, Hicks notes, mark “the 20th time in the last 22 quarters in which the USPS has sustained a loss” and the USPS has not shown a profit since 2006. The overall situation is much worse.
For the last three years the USPS has defaulted on an annual $5.7 billion in retiree health benefits and is on track to default again this year. Postal union boss Fredric Roland wants to eliminate the congressional mandate to prefund the benefits, but Joseph Corbett, chief financial officer of the USPS, told reporters that such a move would not balance the books. “Our liabilities exceed our assets by $42 billion,” Corbett told reporters, “and we have a need for more than $10 billion to invest in new delivery vehicles, package sortation equipment and other deferred investments.”
Congress has been unable to trim USPS services such as Saturday delivery. Senators Tom Carper and Tom Coburn are working on a bill to overhaul the USPS, phase out Saturday delivery, and even some to-the-door delivery. Carper contends that the plan would “make the changes that the Postal Service needs to thrive into the future.” Based on its record, taxpayers have good reason to doubt whether the USPS will ever “thrive.” That is because legislators decline to make the most important change the Postal Service needs.
Legislators should lift the USPS monopoly on first-class mail and let the USPS compete with UPS, FedEx and other companies on that front, just as it now does in package shipping. Only competition in an open market can spur the reforms the USPS needs. Otherwise the federal government will continue to abuse taxpayers, and common sense, by keeping this born loser afloat.