Should We Keep Trying to Save the United States Postal Service?

The United States Postal Service began as a reasonable and effective communications solution, but like everything touched by the government, it has become an employment agency, a collective bargaining program and a massive defunct pension fund. It’s the pensions and benefits that make the Post Office unsustainable, but the same thing can be said about the public school system.

The difference is that the United States Postal Service is not just unsustainable, it’s of dubious relevance to the future. As personal and business communications continue to shift into the digital realm, the United States Postal Service exists as a way to cheaply ship packages, dump print spam in your mailbox and connect the unconnected. Not everyone in America has a computer or wants internet access, but the number of such people is going to continue dropping. And adding more personnel for an organization with no future is an unwise policy.

The United States Postal Service is still necessary, but it’s also a disaster area tied to a bad business model and a million ton weight of pensions. Just about everything has been tried from raising rates to closing branches, but the problem lies in pensions and benefits and those cannot be touched. Instead the United States Postal Service has cut Saturday mail service to save an extra 2 billion dollars to cover pre-retiree health benefits.

The biggest obstacle to postal reform, by far, is the problem of funding Congressionally mandated pre-retiree health benefits. Since 2006, the Post Office has been legally required to pre-fund health benefits for future retirees at a cost of around $5.5 billion a year. For the first time last year, it defaulted on its annual payment.

That’s obviously a temporary solution. There’s only so many days of mail service that you can cut before you cease effective operations.

With its ambiguous status kept at an arm’s length from the government, the USPS continues flailing away with no solutions. Some countries have managed to turn their postal services around, but most of them are smaller than the United States.

The Postal Service performs a valuable service connecting together disparate parts of rural America and perhaps it is those unprofitable but necessary portions of its service that should be considered its core, while shutting down and privatizing most of its services in urban and denser suburban areas where plenty of businesses like Staples or Fed Ex can easily add space to accommodate the basic functions of a post office counter.

Letter delivery cannot be entirely privatized by trying to dump it on Fed Ex or UPS, but dumping junk mail or at least charging for it at a much higher rate, might reduce letter deliveries and mail processing to their core functions, which is not delivering catalogs or solicitation letters.

Shutting down or entirely privatizing the postal service is unrealistic, but freezing hiring and trimming down its functions is only common sense.

The postal service is dying by necessity. Its future may be measured in decades, but barring some sort of national collapse, no one seriously thinks that it will be around in the 22nd century. And that means that we need to look at how to wind down its functions, concentrate them only in those areas that are necessary and plan for a post-post office future.

Either that or we can shove another 34 billion dollars down the hole.

  • http://www.adinakutnicki.com AdinaK

    Eventually, everything started by the gov't turns to crap, spending money they don't have ensures that insolvency will follow.

    In order to run efficiently, only those with experience in capital ventures should take over. Alas, teaching gov't dependent minds to shift gears is akin to making a silk purse out of a sow's ear.

    Adina Kutnicki, Israel – http://adinakutnicki.com/about/

    • J.Scott

      I totally agree with your statement of, "everything started by the gov't eventually turns to crap", espiceally as it relates to a do nothing/ disfunctional Congress led by an incompetent leader. I know of no other business or organization, public or private, who has to pre-fund 100 percent of its future health benefits. To have this legally enforced upon a business or organization by Congress, is incomprehensible. It does not surprise me to see lobbyists from Fed Ex and UPS, Mrs. Paul Ryan being among the culprits, stepping on the necks of American workers and the American people as it relates to our Consitutional right for having a postal system. The United States Governement, a once great idea, but as AdianK would say this too has turned to, "crap".

  • Moliminous

    "It’s the pensions and benefits that make the Post Office unsustainable, but the same thing can be said about the public school system… The difference is that the United States Postal Service is not just unsustainable, it’s of dubious relevance to the future."

    The author makes a serious, fundamental error in judgment and conclusion. The "public school system" is EXACTLY the same as the postal service. The bloated bureaucracies of both have no relevance to the present or the future.

    We don't need "the Postal Service," we need A postal service, one that is cost-effective, on-time and efficacious. Several exist already… and there's one in particular. With the curtailment of Saturday mail as a solution to their fiscal problems, it's estimated that there will be NO mail service by 2018. Maybe that's as it should be.

    As for schools, I strongly suggest and support a Separation of School and State. Parents are the primary educators, not the state, not the federal government, nor its unions and thugs. Parents. Give them the choice and they will decide appropriately.

    The (federal) government has very few Constitutional mandates (though they have usurped power and control from the citizens for years). They have NO mandate in education, nor should they. Yet they stick their collective noses in where it doesn't belong. They are asked to protect our national borders but they continue to ignore those laws or dismally fail in their solutions (eg., Fast and Furious). A Postal Service is mandated but in this they have failed as well and continue to fail (I haven't received my home mail before four p.m. for over 30 years). They're supposed to establish and maintain a monetary system; instead, they created a bogus EBT card system that has no over site, no exit strategy and no consequence for abuse.

    The sitting President has the Midas touch in reverse. Everything he touches turns to _ _ _ _.

  • BLJ

    A useless money pit for the most part. The service here in Chicago is brutal.

  • Ziggy Zoggy

    If the USPS shuts down, who will deliver my 2009 Inauguration Day commemorative souvenir? NOOOO!

  • JacksonPearson

    "Should We Keep Trying to Save the United States Postal Service?"
    Absolutely not. Privatize the Postal Service ASAP.
    It's a proven fact that government controlled anything is a recipe for failure, and endless bailouts.

    • AnOrdinaryMan

      This is why contract post offices usually are more efficient than the standard government run P.O.'s.

      • JacksonPearson

        Agree…
        We have a volunteer non profit charity group, that mans a small U.S. Post Office, that's very busy, and smoothly run.

  • slider 96

    Actually , everyone really knows that it is the internet that's taking the biggest chunk out of USPS revenue . In addition there is the LAW , that the USPS have its pension funded 75 years out . Rural America will always need the postal service thus there will always be a USPS , trimmed down yes , but that will be by attrition .

  • Tom

    The pensions , CSRS and FERS , are both funded 100%. This is not the problem. Misinformation is the problem with some of our newspapers. Do some research. The 2006 PAEA law mandates that the USPS prefund future health benefits for future employees to the amount of $75,000,000,000 in a ten year time period. This is employees who not even born yet. The USPS is the only company, public or private, that does this. Get the story straight. The pensions are not the problem. The 2006 PAEA law is the problem.

    • WilliamJamesWard

      The truth will be buried by Congressional hacks and as the Postal Service provides a "Service",
      if someone does not like it they can go to a competitor and see if they like that service any
      better and at a very much higher cost. America already owns the Postal Service and it is run
      to cover costs only, no profit which keeps it affordable for all Americans. What is going on
      needs to be exposed to the American public but that will most likley never happen. Hundreds
      of thousands of Postal jobs have been done away with over the past two decades and
      will not be available as family supporting work in the future. It is not the Postal Service that
      has pushed our economy into a hole causing financial shortages in every business in
      America, do away with the PO and we will be closer to leftist programmed destruction of
      all of our institutions……………………………William

    • EJ Bell

      Tom, the USPS employees wanted collective bargaining in 1971. They also wanted to stay on the CRCS. Someone has to pay for the $82K average salaries and health benefits for these people. Should it be tha American taxpayer? Why not? We pay for Congressional and Senate retirees so why not theUSPS?

  • Ziggy Zoggy

    Otama;

    Pre-retiree health benefits are mandated to be funded even though there are no such funds available.

    Yes, because if the Obama administration says the pensions are funded it has to be true because the Office of Budget and Management and all the rest of the accounting wh0res wouldn't lie any more than you would.

    If it is funded then where is the actual money? Projected windfalls are composed of just that: Wind. Just like you!

  • WilliamJamesWard

    Shut down to Post Office and privatize, easier said than done. The information I read on the
    problems of the PO is like all partial information not worthy of the conclusions made. First of
    all the Post Office business model is to operate without making a profit, only cover the
    expenses. Tax payers are not funding costs, users are, close the PO and you will have
    no inexpensive shipping of mail or packages, be prepared for obscene hikes.

    The Congress has been feeding off of Postal funds for years and it seems to cover up the
    hundreds of billions sent to the Congressional fund vapor hole, they would see it gone and
    no one will ever see the retirement funds, health benefit funds that most postal workers
    can not afford to carry, espescially into retirement on small pensions. It is not what you
    think and the truth is not coming out and never will, it will be a screwing of our citizens
    by greedy elite scoundrels who are screwing everything up today in our Nation………William