After lots of effort it looked like 2012 might finally be the year Congress passed legislation making major reforms at the U.S. Postal Service, a quasi-private corporation owned by the U.S. government that has been burning through money faster than a clean-energy company with a grant from the Obama Administration.
House Oversight chairman Darrell Issa, R-Calif., has been working for almost two years on a plan for real change at the U.S.P.S. Issa would give the U.S. Postmaster General the authority to make many of the same kind of tough calls a private-sector CEO must make in difficult times. As matters stand, he is a sort of emasculated government manager, with the operational restrictions that implies.
Issa's intervention comes none too soon. The U.S.P.S. is in financial trouble -- again. In November it announced a record loss of almost $16 billion for the fiscal year ending on September 30, 2012. The Postal Service blames the need to pre-fund retiree health benefits but these are still real dollars. If they did not pre-pay the benefits the taxpayers could end up on the hook for them later.
The facts are simple. The postal service has too many employees and too many facilities for the volume of mail it currently processes. There is no way around that nor is there any way around the projections of further decline as new communications technologies eliminate the need to send printed materials from one place to another. About 80 percent of the U.S.P.S.’s total costs are associated with labor; it’s the only place meaningful reductions can be made – unless people are willing to pay more to send Grandma a birthday card than the birthday card itself cost.
As is typical of an agency of the federal government, the proposed fix – as usual - is higher costs accompanied by a reduction in service instead of what is needed: A dramatic reinvention of the postal service for the 21st century.
The Issa approach is a huge step in the right direction but, unfortunately, his efforts are being undercut by the United States Senate, which has passed a postal reform bill that is weaker than even what the Postmaster General himself has proposed doing. The Senate bill continues to kick the mailbox down the road, juggling the figures on the balance sheet and hoping that the eventual day of reckoning never comes.
In a letter to Congress Tom Schatz, the president of the Council for Citizens Against Government Waste, referred to the Senate’s approach as refusing “to directly address what everyone knows needs to be done if U.S.P.S. is to have a fighting chance to continue to provide mail service in the United States without a costly taxpayer bailout.”
Serious reforms that are common in the private sector are required. Issa is pushing hard in the lame duck session for legislation that would at least require the Postmaster General to immediately eliminate 100,000 employees from the U.S.P.S. workforce, firing them if necessary and in spite of the workforce protections that politically powerful postal unions have been able to coerce out of the government in previous years. As governors across the United States have stood up successfully to public employee unions, the Postmaster General must be given the authority to stand up to the postal unions -- otherwise the whole house of cards will eventually come crashing down on the U.S. taxpayers.
The Issa approach is the right way to go. It may be unhelpful to the postal unions but it’s definitely the right approach to “save the company” without triggering another billion dollar taxpayer-funded bailout because of someone’s legacy costs. It also would create an important legislative precedent for dealing with other bloated federal agencies and departments.
But it is essential that Issa stick to his guns and stand on principle. The reform he is pushing is too important to compromise. If the Senate won’t agree to mandatory reductions in USPS headcount then Issa should send postal reform to the dead letter office for the remainder of the year and start again fresh with the new Congress in January. The post office isn’t going anywhere and the Postal Service has acknowledged they have enough cash to keep going through October of next year..
Real change is worth waiting for. If Issa can succeed in reducing the workforce at the U.S.P.S. it will be a clear signal that no government agency, no public-private partnership, no quasi-private corporate is beyond saving or beyond reform.
Peter Roff is a senior fellow at Frontiers of Freedom, a Washington-D.C. think tank.