Bravo to Sean Collins Walsh at The New York Times for nailing the real story behind the U.S. Postal Service financial crisis. Despite the volume of topical stories associated with the precipitous drop in mail volume, no journalist captured the essence of this crisis until now.
Yet the source of the mess is quite obvious to companies that depend upon the post office to run their business. It is as follows:
The U.S. Postal Service is a self-funded organization; tax revenues have not funded it in more than 40 years. Technically, the USPS is run as a private entity with government oversight.
Read that last sentence to yourself again: “…private entity with government oversight.” So as a privately run business, the USPS should have the ability to restructure its operations, cut costs, pursue new revenue streams… anything it sees fit to get itself back into the black. Instead, Congress must propose bills on behalf of the postal service to accomplish these things and then pass those bills into law.
Now I ask you, is Congress in its dysfunctional state really in a position to pass laws that get the post office back on its feet? No less than five bills are floating around that seek to overhaul postal operations.
According to Post Office Inspector General David Williams, one critical issue in the USPS’s financial woes is the over-funding of employee pensions. Currently, the USPS must pre-fund pensions at 100%, a standard that is not required of any government organization. This mandate has created a surplus of overpayments to the tune of $50-80 billion. And the Postal Regulatory Commission (PRC), which manages the pension funds, agrees that this money should be returned to postal coffers.
But guess what? If the government returns this money to the Post Office, that is technically classified as new “government spending.” Guess which Congressional body is going to body block that one?
Read The Times article for yourself if you’re interested in all the gory details. Needless to say, a huge postal-dependent segment of the economy is being held hostage by a Congress-managed post office. And the complete absence of decision-making isn’t business friendly. It’s an economic crisis.
–Sari McConnell at email@example.com