Editorial: Congress must allow postal cutsPublished 10:36am Thursday, February 21, 2013
For years, U.S. Postal Service officials have sent an SOS riddled with financial woes to Congress. Not surprisingly, lawmakers have continued to let the government-run but not government-funded service capsize.
On Feb. 6, USPS leaders stopped waiting for a response from lawmakers and announced the decision to cut mail delivery, but maintain package delivery, on Saturdays beginning in August.
The mail service estimates the move will save $2 billion a year.
It’s a long overdue and much needed move. The agency’s decision has produced little uproar, further solidifying it is the right call and Congress should not intervene — unless to modify legislation in the agency’s favor — with the change.
But axing Saturday service only chips away at the Postal Service’s deeper financial problems. Though the agency consolidated hundreds of facilities and made tens of thousands more cutbacks in its workforce, the agency still reported a loss of nearly $16 billion last year.
That’s more than triple the $5.1 billion loss the previous year. The deficits can be attributed to a combination of the ailing economy, the Internet and obligatory pre-funding of retiree health benefits.
Last year, rather than file bankruptcy, the agency defaulted on $11.1 billion in payments to cover future retiree health care costs. That’s a huge chunk of the $16 billion total, and without that and other labor-related expenses, the agency would have had an operating loss of $2.4 billion lower than in 2011, according to a Feb. 6 USA Today report.
Still, benefits and retirement funds are just part of the underlying problem. Raising a first-class stamp by a measly penny is not the answer, either.
As stamp prices slowly rise and the Internet becomes more prevalent, there’s an increase in consumers who are paying their bills online. And the move to digital will only continue to increase over time.
Like all successful businesses, the Postal Service needs a plan that guarantees it will make money and stay out of debt. American Postal Workers Union President Cliff Guffrey is calling for a solution from Congress.
Congress can start by repealing the 2006 federal law that limits rate increases to the pace of inflation.
Postmaster General Patrick Donahue said he’s continuing to press for legislation that will provide greater flexibility to control costs and make new revenues. He expects an increase in package delivery as e-commerce grows.
Congress has yet to commit to the change or any legislation, and already failed to pass a postal bill last year. As we’ve seen before, taxpayers end up footing the bill when Congress can’t agree on a solution.
Donahue said the agency does not want and will not take any tax dollars.
It’s a wise decision on his part.
— St. Cloud Times, Feb. 19