Issa: Postal Service needs solutions other than a taxpayer-funded bailout
posted at 2:00 pm on June 24, 2011 by Tina Korbe
I like snail mail as much as the next person — actually, full disclosure, I prefer old-fashioned mail to virtually any other mode of communication, social media included — so I’m troubled at the $8.5 billion loss the Postal Service faced last year and the $8.3 billion and $8.5 billion projected losses the Service is expected to sustain this year and next.
So is Rep. Darrell Issa (R-Calif.), chairman of the House Oversight Committee. The Congressman today introduced a bill to reform the Postal Service and save taxpayer dollars. The Daily Caller reports:
The legislation does several things. It creates the Postal Service Financial Responsibility and Management Assistance Authority, “which will have a broad mandate to restructure the Postal Service and reduce costs in order to bring the institution back to fiscal solvency when the Postal Service goes into default to the Federal government. The Authority will be disbanded once USPS meets several benchmarks that ensure financial health.”
It would also create the Commission on Postal Reorganization, whose purpose would be to make recommendations to Congress on closures or consolidations with the goal of reducing USPS costs by $2 billion a year. …
[S]ome regulations would be removed to make it easier for the Postal Service to do things like close postal facilities that are not profitable.
Benefits and salaries for Postal Service employees would be cut, putting them more on the level of what private sector employees receive for similar jobs. Oversight estimates that such measures will save $700 million dollars in the 2010 fiscal year, which ends in September.
Oversight estimates that the reforms will save the Postal Service $6 billion dollars a year when all of them have been enacted.
Issa says these reforms will enable the Postal Service to function “more like a business” — always a sound plan. But a Postal Service statement said much of the bill will actually make it more difficult for the USPS to effect cost-saving changes. According to the statement, the bill provides for an additional $10 billion in borrowing from the Federal Treasury and also creates additional layers of bureaucracy that will “slow [the USPS’] progress at streamlining … operations.”
On its face, the USPS statement is right: The Postal Service doesn’t need to borrow more money and bureaucracy is certainly the enemy of efficiency. But it’s difficult to see the connection between the statement and the actual bill. One provision of the bill in particular makes complete sense to me: The USPS absolutely should have the freedom to close non-profitable post offices. The details of Postal Service reform might still have to be teased out and tweaked, but this bill is a step in the right direction. As always, Issa’s vigilance in the service of taxpayers is much appreciated.