Postal Service is important to nation, economy

It is time to rethink the role of the US Postal Service and, perhaps, provide taxpayer subsidy to keep it operating.


Fast and reliable mail delivery service is important to the nation, which is why it was originally a function of government.

Yet, the U.S. Postal Service - established by Benjamin Franklin in 1775 by decree of the Continental Congress - is now a quasi-government agency. It has not been directly funded by taxpayers since the early 1980s when it was set up as an independent agency expected to generate enough revenue to be self-sustaining.

Clearly, that's not happening. The Postal Service is facing a projected deficit of $7 billion this year.

As a result, Postal Service officials are seeking yet another rate increase - stamps from 44 cents to 46 cents, an 8 percent increase for periodicals and 23 percent for some parcels. In addition, Saturday service is targeted for elimination.

Is this the answer to the Postal Service's fiscal woes?

Probably not. The problems go far deeper than a one-year revenue gap - albeit a huge one. The Postal Service's way of doing business is outdated.

Unfortunately, creating a new business model to deal with today's economic realities - and the Internet - is a monumental task. Private delivery services can focus on areas where there is profit and leave the costly chore of daily mail service.

Meanwhile, more and more people are paying bills using the Internet. People are also using e-mail instead of letters. As a result, costs have gone up while revenue continues to dip.

Raising rates, particularly when it comes to periodicals and parcels, could drive business elsewhere. Magazines and newspapers, including this paper, use the Postal Service to deliver their products. The higher the rates go the more publishers will seek alternative delivery systems.

And if the cost of a stamp continues to climb and climb those using the Postal Service to pay bills and send letters will reduce their use of stamps.

In the long run a significant rate hike could drive the Postal Service deeper into the red.

It's time to rethink the role of the U.S. Postal Service.

This includes improving customer service. The Postal Office has to adapt quickly to changes in the marketplace just as private-sector businesses must do.

Still, it's likely Congress will have to step in to supplement service with tax dollars to ensure daily mail delivery continues.

Yes, costs must be cut even further. Sadly, that means Saturday delivery will likely be gone. A modest rate hike might also be necessary to keep the Post Office afloat until a long-term plan can be developed.

But what is certain is the U.S. Postal Service is critical to the nation and its economy.

It must be made viable or steps have to be taken to allow a private carrier to fill the niche as a contractor.

The mail has to be delivered quickly and affordably.


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