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The death of snail mail in an electronic world

Posted: September 13, 2011 - 11:01pm

The following editorial appeared in the Fort Worth Star-Telegram:

The U.S. Postal Service, a cumbersome, complex behemoth tied down by the restraints of Congress, has seen more changes over its more than 200 years than perhaps any other governmental or quasi-federal agency.

The constitutionally mandated service, for the most part, has evolved with the times — providing mail delivery by steamboat, Pony Express, railroad and jet airplanes. But, in recent years, the post office has been hog-tied by an outdated business model that has forced it to the edge of economic disaster.

Last week, Postmaster General Patrick Donahoe warned congressional leaders that the USPS “is at the brink of default.”

The reason: the Postal Service can’t afford to pay the U.S. Treasury a mandated $5.5 billion for future retirees’ health benefits. Donahoe asked Congress to enact comprehensive legislation by the end of the month to prevent a default.

President Barack Obama is expected to propose a 90-day extension on the retirement fund payment, which would give postal officials, the administration and Congress time to consider a more extensive plan to help stabilize an organization that, according to Donahoe, is losing so much money that it might have to shut down by next summer.

The Postal Service’s financial problems go beyond its pension fund requirements. Electronic communications options — online banking, bill paying, shopping and other services — have caused the volume of postal mail to fall 22 percent since 2006, and competition for package delivery services is stiff.

The USPS is likely to lose $10 billion this fiscal year. Even though it hasn’t received federal subsidies in decades, the service still is overseen by a board of governors appointed by the president. That government oversight hampers agile decision-making that would allow the service to compete effectively in a rapidly changing marketplace.

According to the Postal Service, it is the second-largest civilian employer in the country (behind Wal-Mart), with around 600,000 workers, and runs the largest civilian fleet in the world.

Unlike its major competitors, the Postal Service is required to offer universal service to the public at affordable prices and similar quality regardless of location.

Donahoe said he knows that the agency, which has been an “independent” company since the early 1980s, needs a “radical” overhaul of its business model.

“The Postal Service is in crisis today because it operates with a restricted business model,” he told members of the Senate Homeland Security and Governmental Affairs Committee. “As a self-financing entity that depends on the sale of postage for its revenues, the Postal Service requires the ability to operate more as a business does.”

But it can’t under the current structure.

To make major management decisions, the Postal Service needs permission from Congress, which more often than not is a politically divided and indecisive body that can be more of a hindrance than a help.

For instance, eliminating Saturday home delivery has been debated as a potential money-saver. Congress made six-day delivery mandatory in 1983 and would have to approve any change in the frequency. And talking about closing underused local post offices typically gets members of Congress up in arms.

Several congressional leaders have vowed to consider some of the postmaster general’s recommendations, but resistance from some constituencies is almost certain.

For the short term, Congress should grant the 90-day delay in payment to the retirement fund and give the postmaster general authority to reorganize staff and refine services.

For the long term, Congress must decide what essential communication services the Postal Service can and should continue to provide and then give it the ability make tough, sensible business decisions that will enable it to compete with the private sector.

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