Postal Reform: A Chance for Republicans to Say Yes!
“Without continual growth and progress, such words as improvement, achievement, and success have no meaning.”
That is one of many truisms expressed by the nation’s first Postmaster General, Benjamin Franklin. Franklin was a prodigious polymath: inventor, scientist, statesman, and diplomat, his natural gifts were rendered even more productive by his indomitable optimism about the power of innovation and the promise of the future. Franklin was one of the most tech-friendly Founding Fathers; as postmaster, he fashioned an odometer for his carriage wheels so he could determine the most efficient route for delivering the mail.
He would certainly be dismayed at the stagnation and backwardness that characterizes today’s United States Postal Service (USPS) compared to the private-sector mail and communications industry. Perhaps worse than its sorry financial state and bureaucratic stultification, Franklin would be puzzled by the postal establishment’s entrenched resistance to modernization and innovation; to drop a popular phrase, today’s postal service ain’t Ben Franklin’s postal service, and that ain’t good.
The statistics have been repeated over and over: first-class mail volume has dropped 29 percent over the last five years. That trend is permanent. The USPS posted losses of $15.9 billion in 2012 and the agency expects annual losses to burgeon to $18.2 billion by 2015, and to have accumulated $92 billion in debt by 2016.
The USPS is burdened with crushing pension and retiree healthcare obligations, a surplus of brick and mortar facilities, rigid work rules, and a surfeit of aging employees. The USPS has shed 200,000 over the past several years, but still needs to shrink by another 100,000 jobs through attrition by 2016 to regain fiscal stability. Most attempts to right-size the labor force and physical infrastructure automatically meet with zealous obstruction and foot-dragging from postal unions and backroom meddling from members of Congress.
Whereas the private sector has made significant productivity gains over the last few years, the USPS remains mired in what the Government Accountability Office (GAO) has called a “broken business model,” yet little is being done to introduce the efficiencies and innovation that could not only forestall a massive postal bailout by taxpayers, but transform the postal service into a nimble communications concern fit for the twenty-first century.
To be fair, current postal management has made a conscious effort to face reality and leverage it as an opportunity to create a better USPS. The postal service announced on February 6, 2013 that it would transition to five-day delivery service starting on August 1, 2013, which would save $2 billion annually. Unfortunately, that reform was summarily blocked by Congress and, by April, postal officials were forced to retreat.
Postmaster General Patrick Donahoe sees the handwriting on the wall and has cautioned that if Congress obstructs the USPS from achieving structural reforms, it risks triggering the agency’s failure and a taxpayer bailout.
At the moment when postal management has chosen to move forward with overdue modernization initiatives (and moving to five-day delivery is a modest step in a series of requisite, systemic reforms), it is saddled with an intransigent labor force (and its moneyed lobbying shops) which resists modernization, and an easily intimidated klatch of congressional overseers, some of whom seem more fixated on short-term, feel-good measures posing as postal reform than on the long-term financial health of the USPS and leveraging this opportunity to usher in a new age for mail delivery.
Both the Republican-led House and Democratic-led Senate are being pilloried in the press and by taxpayers for their dithering ineffectiveness; Republicans have been labeled the “Party of No.” While it is in fact a service to taxpayers to present a unified front against the onslaught of wasteful public policy initiatives, members of Congress on both sides of the aisle have failed to recognize that authentic postal reform is a golden opportunity to say “yes” to a twenty-first century, technology-driven, inventive postal service.
The USPS is already a world leader in “work-sharing,” but there is virtually nothing that the postal service currently does (logistics, transportation, mail sorting, etc.) that could not be done, and done more efficiently, by private sector companies.
In January 2013, a group of four veteran postal experts collaborated on and submitted a paper for review by the National Academy of Public Administration. The paper, authored by former Deputy Postmaster General John Nolan, former Chair of the Postal Rate Commission Ed Gleiman, former National Legislative and Political Director for the National Association of Letter Carriers George Gould, and Atlas Society Director Ed Hudgins made a compelling case for a new postal paradigm, “Restructuring the U.S. Postal Service: The Case for a Hybrid Public-Private Partnership.”
The authors suggest that the USPS continue to leverage its already expansive network to manage the collection and delivery of mail in the “final mile” of the downstream mail chain, but dramatically expand its already growing work share agreements to allow the private sector to perform every other upstream function currently being performed by the USPS. The USPS would continue to monitor the delivery standards, but private-sector companies that are capable of performing other services and tasks even more efficiently, such as processing, sorting, and transportation, would enter into contracts with the USPS to meet those delivery standards and pay the USPS a fee for the business.
The NAPA reviewers identified certain difficulties in implementing such a forward-leaning program, such as dealing with the USPS’ universal service obligation and the problematic issue of the agency’s immediate liquidity problems. While the reviewers could not endorse the paper’s concepts as presented, they did deem it worthy of further consideration and, insofar as the paper recognizes the modernizing impact that work sharing is already providing, encouraged postal management to leverage the flexibilities it currently has to maximize revenues and realize efficiencies.
The private sector is far ahead in the race to leverage technology to transport first-class mail and parcels across the globe even faster, and at lower costs to all mailers. These best practices can and should be part of any postal reform initiatives Congress undertakes.
Perhaps most intriguing, these private sector efficiences could be harnessed to achieve significant postal reform simply by requiring the establishment of a final mile delivery charge. No new government program. No new bureaucracy. If the private sector can indeed do processing and transporation to the local delivery sort plant better, faster, cheaper then the private companies will just pay the charge.
Unfortunately for the ailing USPS, the current Congress has several things working against it: a striking lack of vision, susceptibility to the pressure of the entrenched and obstructionist postal unions, and, perhaps most pernicious of all, postal reform fatigue. Congress tends to treat the USPS’ fiscal woes as a wound that requires emergency triage and a quick-fix financial tourniquet. Instead, Congress must recognize postal struggles as a chronic wasting condition requiring systemic and holistic structural changes.
Many of the most active players in postal reform, such as House Oversight and Government Reform Committee Chairman Darryl Issa (R-Calif.) and Senate Committee on Homeland Security and Governmental Affairs Chairman Tom Carper (D-Del.) have been toiling in the trenches for years, trying to craft postal reform legislation. Chairman Issa’s most recent postal reform endeavors in the House contain more structural reform than the patch-it-up-now-and-kick-the-can Senate effort, but even the House bill does not explicitly direct structural change. The desire to apply the band-aid, take a victory lap, and move on is understandable, but that won’t fully cure the patient.
That eighteenth-century techno-geek, the good Dr. Benjamin Franklin said many pithy things during his long and productive lifetime. When it comes to the future of the U.S. Postal Service, there are two aphorisms in particular that resonate: “By failing to prepare, you are preparing to fail” and “Time is Money!”
