U.S. Postal Service officials caved to congressional pressure this week and dropped their plan to end Saturday delivery. There has rarely been a more striking illustration of what ails the Postal Service -- that would be Congress. Last year, postal officials faced up to their more than $20 billion in losses since 2011 by proposing a slate of drastic cost-cutting measures and management reforms, with termination of Saturday letter delivery being the most visible part of a five-year plan to restore the USPS to something at least approaching profitability.
Saturday package deliveries would have continued under the proposal, but starting Aug. 5 customers would have had to wait until Monday to read those mass fundraising solicitations, credit card offers, vacation time-share pitches and miscellaneous other postal dregs. The $2 billion thereby saved would have significantly slowed the river of red ink that is drowning the Postal Service. As James L. Gattuso of the Heritage Foundation observed of the idea, "It's a common-sense change and one the Postal Service can ill-afford to put off. USPS is drowning in a tsunami of red ink. It has suffered losses for six consecutive years, losing almost $16 billion last year alone."
But too many senators and representatives from both political parties cannot bear the thought of losing control over the storied federal service that delivers millions of franked -- i.e., "free" -- paper communications telling constituents how lucky they are to have such sterling representation in the nation's capital. It's the same parochialism that prevents the USPS from closing thousands of little rural outlets that do little more than sell a few stamps here and there. The same narrow thinking handcuffs USPS efforts to convert at least some of its vast supply of surplus property from liabilities to assets.
In short, there is no mystery about what is required to bring the post office into the 21st century: give postal officials the same management flexibility that powers private-sector business innovation and profitability. The problem is Congress refuses to stop dealing with postal concerns as if Ben Franklin were still slogging through the snow, rain, heat and sleet to deliver letters to grandma's house in the woods. The reality is that grandmas today use Facebook, Skype, Droids and iPhones to keep up with their grandchildren.
As long as Congress insists on maintaining its control over the USPS, the service will continue running massive operating deficits, steadily falling further behind on properly funding its pension and disability obligations and sitting on assets that could be sold to fund the postal future. As Gattuso also noted, "the Postal Service is in the same position as Kodak, Smith-Corona and many other firms whose products were made obsolete by digital technologies. Like them, the Postal Service must now develop a new business model. Whether that is package delivery, real estate or something else entirely. That, however, is a job that requires the skills of an entrepreneur, not politicians. And such entrepreneurs are rarely found in government agencies, or on Capitol Hill." Remember that the next time the price of a first-class stamp goes up, again.