The U.S. Postal Service lost over $10 billion dollars last year. They lost $8 billion in 2011. As pretty much nobody under thirty has mailed a letter since their Santa list, this Malthusian math template of exponential loss is hardly surprising. Further, given Washington’s now imbedded inability to legislate prior to reaching the precipice of utter disaster (stay tuned for impending sequestration), the quickly escalating amount of insolvency will require the time-tested taxpayer bailout in the very foreseeable future as there will soon be no money in the coffers to meet the payroll for its 574,000 employees.
The Postal Service was ‘spun off’ from the federal government in 1971 to become an “independent” agency so that it could be run more like a business. All righty then. Unlike any other modern business, it started with a virtual monopoly and started its new entrepreneurial life with billions of dollars worth of land, buildings, equipment, vehicles, and a trained workforce of 700,000. The service was “required” to then cover its own expenses, but there was a teeny exception: taxpayers would essentially guarantee certain Postal Service-paid obligations-like pensions, retiree benefits, and salaries. Not quite the same package, so to speak, is available at Federal Express. Needless to say, those pensions, benefits, and salaries have become far more generous than is the case in the private sector and overall compensation as a percentage of revenue has climbed steadily as the mail volume has gone off a cliff.
Admittedly, the Postal Service has had to operate under certain constraints such as.. wait for it… congressional oversight. Apparently, both Republicans and Democrats receive mail and have constituents in rural areas. As such, while there is much bloviating about insolvency and waste, there has actually been a tradition of bipartisan inertia when it comes to reforming the U.S. Postal Service. In fact, this is one area where both parties have worked well with each other to do absolutely nothing.
Over the many years, The Postal Service has performed a credible, affordable service for much of the time since its founding in the 1860’s. But, like The Pony Express before it, the agency has been unable to restructure its business model to adapt to changing conditions. The decline in first class mail is driven by an ever-increasing transformation to a paperless economy. The death knell has tolled for many a newspaper in this country. Even Pravda has an electronic edition. The problems of the USPS are not insurmountable, but one wonders if a credible, self-sustaining business model involving any agency of the federal government is possible. In the meantime, the postage is due and, once again, it is the U.S. taxpayer who has to come up with the coin.