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Businessman-Turned-Lawmaker Has a Plan to Save U.S. Postal Service

Posted By Rob Bluey On June 24, 2011 @ 10:43 am In Scribe | Comments Disabled

[1]

Rep. Darrell Issa knows a thing or two about running a successful business. Before winning his seat in Congress, the California Republican turned a troubled company into a profitable enterprise that manufactured car alarms for the world’s most well-known carmakers.

Issa is now turning his attention to saving the long-troubled U.S. Postal Service [2].

“The Postal Service lost $8.5 billion last year. It is going to lose, at least, $8.3 billion this year. And it is projected to lose $8.5 billion the year after that,” said Issa, who serves as chairman of the House Oversight and Government Reform Committee.

Without changes, the future is grim.

“The post office is on the wrong side of the information revolution,” Heritage’s James Gattuso wrote last month [3]. Gattuso noted that even with $11 billion in cuts since 2008, the prospects are bleak for the Postal Service.

Just this week the Postal Service announced it would stop paying its portion toward employees’ retirement [4], potentially leaving taxpayers on the hook.

Issa’s legislation is the most comprehensive plan put forward in Congress. Other lawmakers have proposed changes to USPS, but Issa said only his ensures its solvency. He estimates it would reduce costs by $6 billion. Other changes would need to make up the remaining shortfall.

How does he do it? Issa adopts several ideas supported by Heritage. He would eliminate Saturday mail delivery, close unprofitable post offices and bring USPS compensation in line with the private sector. He also wants to modify the collective bargaining process and require workers to pay more toward their health and life insurance.

One thing the legislation doesn’t do is eliminate the Postal Service’s monopoly on first-class mail. Heritage’s Gattuso has argued that introducing competition — and not just from FedEx and UPS — would be an important factor for a revitalized USPS.

“New blood may be just what mail delivery needs,” Gattuso said.

Issa’s reforms would be carried out by a BRAC-like entity called the Commission on Postal Reorganization. It would be tasked with recommending closures of post offices, mail processing and management facilities. Congress would have the power to reject the commission’s work.

A second body, the Postal Service Financial Responsibility and Management Assistance Authority, would be tasked with returning the Postal Service to fiscal solvency. Once the Postal Service was able to meet its financial obligations, the authority would be dissolved.

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Article printed from The Foundry: Conservative Policy News from The Heritage Foundation: http://blog.heritage.org

URL to article: http://blog.heritage.org/2011/06/24/businessman-turned-lawmaker-has-a-plan-to-save-u-s-postal-service/

URLs in this post:

[1] Image: http://www.foundry.org/wp-content/uploads/ptsphotoshot208702-B950_140.jpg

[2] saving the long-troubled U.S. Postal Service: http://issa.house.gov/index.php?option=com_content&view=article&id=838:issa-introduces-postal-reform-act&catid=63:2011-press-releases&Itemid=4

[3] Heritage’s James Gattuso wrote last month: http://www.heritage.org/Research/Commentary/2011/05/Paper-Cut-Postal-Service-Gets-Wrong-Kind-of-Band-Aid

[4] stop paying its portion toward employees’ retirement: http://www.foxnews.com/politics/2011/06/22/issa-warns-new-bailout-as-postal-service-suspends-pension-contributions/

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