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The Postal Crisis Easily Explained: How to Avoid a Taxpayer Bailout

Posted By Rob Bluey On October 12, 2011 @ 6:00 am In Featured,Scribe | Comments Disabled

The House Oversight and Government Reform Committee meets Thursday [1] to consider the most substantive postal reform plan [2] under consideration in Congress.

The debate in Washington triggered a spending spree from postal unions opposed to the reforms, including a national TV ad campaign [3] launched last month. Now the Oversight Committee is striking back with its own video that explains the crisis [4] and why the Postal Service needs to be fixed before taxpayers are left paying the bill.

Mail volume has dropped by 46 billion pieces since its peak in 2006. As a result, the Postal Service lost $4.5 billion in fiscal 2011. But even with the decline in mail volume, retired postal workers still collect a pension. But who will pay?

Opponents of reform would prefer Congress use an accounting gimmick, according to the Oversight Committee. Chairman Darrell Issa (R-CA) has another solution. He’s teamed with Sen. John McCain (R-AZ) and Rep. Dennis Ross (R-FL) to introduce the Postal Reform Act [2]. The plan allows the Postal Service to operate like a private-sector business, cutting expenses while making structural reforms [5] to avoid a multi-billion taxpayer-funded bailout. Issa spoke to Heritage about it last week [6].

Heritage’s James Gattuso called the plan the most comprehensive postal reform bill [7] in Congress. Without action from Congress, Gattuso warned that the prospects are grim:

Congress should act quickly to address this not-so-slow-motion postal train wreck. The goal, however, should not be to “save” USPS or even to save mail delivery. Policymakers should not play King Canute, ordering back the advancing tides of technology to preserve an obsolete industry. Nor should taxpayers be asked to pay for such an effort. Instead, the aim of policymakers should be to remove barriers that are hindering efforts by USPS to adjust to the new digital world. This should include making it easier for USPS to close post offices, reduce its workforce, and trim services.

UPDATE: Corrects fiscal 2011 financial figures for the Postal Service. The loss was $4.5 billion, not $10 billion, since the $5.5 billion payment to the government was postponed.


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

URL to article: http://blog.heritage.org/2011/10/12/the-postal-crisis-easily-explained-how-to-avoid-a-taxpayer-bailout/

URLs in this post:

[1] meets Thursday: http://oversight.house.gov/index.php?option=com_jcalpro&Itemid=1&extmode=view&extid=334

[2] most substantive postal reform plan: http://postal.oversight.house.gov/

[3] a national TV ad campaign: http://thehill.com/video/in-the-news/182389-postal-service-union-ad-blames-congress-for-budget-shortfall-

[4] video that explains the crisis: http://youtu.be/QPBtYIOneEU

[5] making structural reforms: http://oversight.house.gov/index.php?option=com_content&task=view&id=1457&Itemid=29

[6] Issa spoke to Heritage about it last week: http://youtu.be/kg4fe9rkpnI

[7] the most comprehensive postal reform bill: http://www.heritage.org/Research/Reports/2011/09/Youve-Got-No-Mail-Is-the-End-Near-for-the-Postal-Service

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