The cut's in the mail
By Tom Purcell
Published: Saturday, Feb. 9, 2013, 9:00 p.m.
It's Nixon's fault.
I speak of the financial woes of the U.S. Postal Service, and the news last week that its hopes to cut Saturday mail delivery to save a few billion dollars a year.
As it goes, President Nixon, tired of strikes by then-government postal workers, signed the Postal Reorganization Act into law in 1971. It established the Postal Service as a quasi-private organization required to pay its own bills with revenue it earns selling stamps.
To the Postal Service's credit, it has not, for the most part, needed taxpayer money to fund its operations. Taxpayer money, says PBS, “is only used in some cases to pay for mailing voter materials to disabled and overseas Americans.”
But thanks to technology, the postal business isn't as lucrative as it used to be. Few people write and mail letters anymore. I used to spend three hours each months writing checks to pay my bills and dropping 15 or so payments in the mail — now I do online checking in about three minutes and the funds are transferred electronically, free of charge.
Annual USPS revenue, which peaked in 2008 at $75 billion, is down to $65 billion and will continue to decline as fewer people use the mail. Our struggling economy also is doing the Postal Service no favors.
Compounding USPS woes is a congressional mandate from 2006. It requires the Postal Service, through 2016, to make an annual pre-payment of $5.5 billion into a fund to cover health-care costs for future retired employees.
Unlike Medicare, Social Security or any other government organization, the Postal Service is required to put money into a real “lock box” to fund future liabilities — rather than let future taxpayers worry about covering the costs.
The $5.5 billion pre-payment, however, only accounts for about a third of the Postal Service's $15.9 billion in losses in fiscal 2012. No matter how you look at it, the Postal Service is bleeding red ink by the tanker load.
That doesn't bode well for the 550,000 people employed by the Postal Service — America's third largest employer, in fact, behind the federal government and Wal-Mart. And I feel sorry for these folks.
It's not their fault the Postal Service is unable to adapt to modern times — unable to find ways to sell new products and services to post offices' nearly 1 billion annual visitors.
Most postal employees are crushed under the weight of outmoded business processes and bureaucratic inanities. They lack the organizational support to serve customers as well as they would like. They are unable to help their employer grow and thrive.
But here is the real problem postal workers face: Because the Postal Service is technically an independent entity, the federal government won't extend it billions in printed money to cover its budget shortfalls — as our government does with every other government organization.
If only the Postal Service were still a full government organization, it wouldn't have a worry in the world — for the moment, anyhow.
Consider: Our government's annual deficit has been in the $1 trillion range for five years running. What's another $15.9 billion? All we'd have to do is print another $15.9 billion to cover the Postal Service's shortfall.
Actually, we'd only have to print another $10.4 billion. Because if the Postal Service were fully a government organization, nobody in Congress would make it put aside $5.5 billion a year to fund the needs of future retirees.
There's a lot of finger-pointing going on to explain the Postal Service's budget woes. I say blame it all on Nixon.
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