Mission of U.S. Postal Service remains vital

"The Postal Service needs to take a hard look at every major postal policy, from employee pay, to days of delivery, to the closing of postal facilities. Everything must be on the table. Because without major changes, the day is fast approaching when the USPS will be unable to meet its obligations."

- U.S. Rep. WilliamLacy Clay Jr.

For the past four decades, letter carriers and other postal employees have had no more loyal friends than Lacy Clay and his father, former Rep. Bill Clay, two St. Louis Democrats who have represented Missouri's First Congressional District since 1969. The senior Mr. Clay even was chairman of the House Post Office and Civil Service committee for his last four years in Congress.

So when the time comes that a Clay says the Postal Service must "transform itself to survive as a viable entity," things must be serious, indeed.

They are.

Recently the Postal Service announced that its deteriorating finances may force it to cut Saturday deliveries and close thousands of post office branches across the country. In July, the Postal Service won a place - alongside Medicare, Medicaid, the Pension Benefit Guaranty Corporation and federal oversight of food safety - on the Government Accountability Office's list of "high-risk" government functions needing urgent restructuring.

The problems are easy to understand. In the last two years alone, mail volume in the United States has plummeted from approximately 210 billion pieces a year to 180 billion. In part, that's because of the recession, but e-commerce also has played a significant role.

A large volume of personal letters, of course, have moved to e-mail. But consider the simple, if onerous, process of paying bills. In 2001, 80 percent of these payments were made by first-class mail. By 2008, that number had declined to 56 percent with fully 38 percent now paid electronically. All of that is revenue lost to the Postal Service.

Against these trends stands the nation's largest civilian federal agency workforce, about 633,000 career and 94,000 non-career employees. They receive generous health and retirement benefits, but billions of dollars in pension liabilities are unfunded. The agency also maintains nearly 38,000 facilities nationwide. McDonald's has only 13,380 or so U.S. locations, but it doesn't have to serve hamburgers in every hamlet.

The GAO recommends that the Postal Service consider reducing deliveries to five days a week, close or consolidate mail processing facilities with large unused capacity - and above all reduce labor costs through early retirements and reduced health and life insurance benefits. All of these steps would need congressional approval.

Some perspective: The Postal Service has experienced about a $7 billion operating loss this year and is expected to lose another $7 billion next year. No small sums. But these numbers are positively quaint compared to the bushel loads of taxpayer funds used to keep the financial services industry afloat.

What's more, "right-sizing" already is occurring. More than 160,000 postal service employees will be eligible to retire this year; 140,000 more will eligible to retire within four years.

Clearly, though, as Mr. Clay observes, big things will have to give. But as policymakers weigh their options, they should realize that people, while they spend a lot of time online, still live in the real world. Business may be down, but 180 billions of pieces of mail a year are vitally important.

Even in the digital age, the Postal Service's mission of "binding the nation together" with universal service, at fair and reasonable rates, must be preserved.