Despite the sea of red ink the U.S. Postal Service is adrift in right now, it’s not going out of business this month or this year.
Congress can’t let that happen. The nation needs mail to be delivered quickly and at a reasonable cost. Mail delivery is an essential service.
Nevertheless, the Postal Service must dramatically change the way it operates.
The Postal Service is now facing default on about $11 billion in postal retirees’ health benefits payments due to the Treasury this month and next. The agency is also facing a $1.5 billion payment for workers compensation and millions in interest payments in the coming months.
It looks bleak. And Congress, to this point, is deadlocked in finding short-term and long-term solutions.
Congress needs to get serious. It needs to overhaul the agency in a way that allows for the basic postal needs of the nation to be met over the long haul.
The Postal Service is a function of the federal government, but it has been set up to operate like a private business — meaning it must be financially self sustaining. Yet its ties to government burden the agency with costs the private sector isn’t obligated to pay.
For example, the Postal Service is obligated to prefund benefits. This has cost it more than $20 billion since 2007.
But it is also making bad business decisisions. It is unnecessarily subsidzing direct mail advertising. (Full disclosure: As a newspaper we profit by delivering advertisements.)
The advent of the Internet has been the toughest blow to the Postal Serivce. First-class mail volume has fallen 25 percent since 2006 and is projected to drop another 30 percent by 2016. It’s obvious why the Postal Service is on the ropes.
The trick for the Postal Service is to reduce the billions of dollars in losses while still offering a service that gets the letters and packages delivered at an affordable price. It won’t be easy, and it will likely require taxpayer subsidy.
Earlier this year postal officials cut expenses, which resulted in a reduction in service hours throughout the nation, including the Walla Walla Valley.
Deeper cuts are coming. It’s likely the Postal Service will eliminate one day of delivery and reduce the speed at which letters and packages are delivered.
Those changes and more will have to be accepted by Congress and the public for the U.S. Postal Service to continue its core mission of delivering letters and packages across America.