The WasteWatcher: The Staff Blog of Citizens Against Government Waste

For USPS, Time is Running Out

The WasteWatcher is the staff blog of Citizens Against Government Waste (CAGW) and the Council for Citizens Against Government Waste (CCAGW). For questions, contact blog@cagw.org.


Yesterday, Postmaster General Patrick Donahoe testified before the House Committee on Oversight and Government Reform on the fiscal straits faced by the United States Postal Service (USPS).  Postal Service reform in order to prevent an expensive taxpayer bailout has been on CAGW's radar for a long time, but Congress has not allowed the USPS to do what is necessary to cut costs.  Donahoe's testimony should make it harder for Congress to keep ignoring the problem. Donahoe testified on what has been clear for some time: the Postal Service is hemorrhaging cash at an alarming rate.  The USPS recorded losses of $15.9 billion in fiscal year 2012 and has netted losses of $41 billion over the last six fiscal years. Most alarming of all, Donahoe stated that the Postal Service currently averages losses of $25 million per day. Yet modest reforms, such as switching to a five-day delivery schedule of first-class mail, which the USPS estimates would save $2 billion annually, have consistently been obstructed by Congress.  Closing excess facilities and downsizing the Postal Service’s workforce have proved similarly problematic. Congress’s most significant action on postal reform occurred nearly a year ago, when the Senate approved legislation to allow a woefully inadequate amount of facility closures in 2012 while adding to the red tape in the approval process for future closures and delaying the move to five-day delivery by two years. Conversely, House Committee on Oversight and Government Reform Chairman Darrell Issa’s (R-Calif.) Postal Reform Act, first introduced in 2011, would establish the Postal Service Financial Responsibility and Management Assistance Authority upon a USPS default on debt to the federal government for more than 30 days. Once the USPS has met pre-established benchmarks of financial health, the authority would be disbanded. The bill would help right-size an agency that threatens to gouge taxpayers for billions due to its own mismanagement. The USPS must be allowed to make changes that any private-sector firm with even a hint of a self-preservation instinct would have made years ago. As Postmaster General Donahoe explained in his testimony, ‘Every option has to be put on the table … piecemeal efforts simply will not work.’  While it may be politically convenient for certain members of Congress to hold the line and block Postal Service reform in the present, it is becoming increasingly clear that, barring significant reform, there may not be a Postal Service to defend in the future. At that point, the USPS's long-held contention that it operates "at not cost to taxpayers" will look very silly indeed, and its popularity seems likely to take a serious hit.  But most Americans don't much like being forced to pay for products they choose not to consume, and the Postal Service - along with its defenders who would block reform - would do well to remember that the types of "drastic" changes they oppose could look much more reasonable in the harsh light of a taxpayer bailout.

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