A quick quiz:
With the U.S. Postal Service facing a fast-approaching self-imposed May 15 deadline to start closing thousands of post offices, the U.S. Senate recently:
Unleashed the Postal Service to fully compete in the market, giving it the flexibility it needs to survive;
Kicked the can down the road for another year, setting up an elaborate process that ensures that few if any post offices will be closed any time soon.
Did we stump you? Didn’t think so. The answer is, of course, B. The Senate, after months of dawdling, finally passed a bill a couple of weeks ago, but it fails to deliver the flexibility the Postal Service needs to operate like a business and compete in the rapidly evolving market.
For months, the Postal Service has said it needs to start closing more than 3,700 post offices and some 220 processing centers to stave off bankruptcy. The Senate bill postponed that reckoning for at least a year.
So the Postal Service acted last week: It announced that it will no longer seek to close most of those post offices. Instead, it will scale back service hours to save an estimated $500 million a year starting in 2014. Under the proposal, 13,167 post offices will open for two to six hours a day.
We’re guessing that postal authorities were reading the political tea leaves and made the best of a bad situation.
The Senate bill would require the Postal Service to issue a “study” before closing any processing facility, writes Emily Spain, communications director for Democratic Sen. Tom Carper of Delaware, one of the bill’s co-sponsors: “The study must evaluate the option of downsizing rather than closing the facility. The bill would also establish a rigorous public comment opportunity and require a response to those comments from the Postal Service as well as documentation that important factors have been considered prior to …”
You get the idea. Nothing was going to happen soon — or fast.
“If this bill were to become law, we would be back before the Congress within a few years requesting additional legislative reform,” Postmaster General Patrick Donahoe said.
In other words: Return to sender. Senators, listen to the nation’s postmaster. Start over.
The U.S. House has its own reform bill, which differs from the Senate’s but still delays a massive market-driven overhaul for the Postal Service.
But the urgent need remains. The Postal Service loses $25 million a day. It has too many workers and processing centers for its declining volume of first-class mail. Fewer than half the bills in the U.S. are now paid by mail; the online share is growing fast. First-class mail volume is projected to drop by roughly half in the next eight years as more communication goes cyber.
Scaling back postal hours barely flicks at the problem. Much, much more needs to be done to rescue the Postal Service.
Congress needs to give the Postal Service maximum flexibility to compete in the market. It needs to be able to raise rates on money-losing mail categories fast enough and high enough to make money. The nation’s largest mail-carriers union recently released a report that calls on the Postal Service to raise stamp prices, which it says are among the lowest in the developed world. But a 2006 federal law limits rate increases to the rate of inflation. Repeal that law.
Congress needs to end the Postal Service’s monopoly on delivering everything that lands in your mailbox. Invite more private competition, as some European countries have. The Postal Service will innovate to compete or … let other carriers serve customers better. Either way, customers ultimately stand to gain.
The Senate, however, rejected an amendment that would have effectively allowed any carrier to deliver to your mailbox. “That tells me all I need to know with regard to these politicians having any interest in moving the Postal Service into the 21st century,” Tad DeHaven, a Cato Institute budget analyst, told us. “The answer is, they don’t.”
They don’t.
