The biggest problem with the USPS is Congress

Close-up of the Capitol's dome with the US flag

April 13, 2018

President Trump doesn’t need a new commission to figure out how to fix the US Postal Service, as he has called for. He could just read what prior analysts have found. Or better yet, ask the Postal Service itself.

Through no fault of its own, the Postal Service, which lost $2.7 billion in 2017, is a perennial basket case that is essentially built to hemorrhage money. It’s not a normal federal agency, funded by Congressional appropriation, but it’s not a normal corporation, either. Instead, it’s a hybrid operation that couldn’t possibly exist in the same form in the private sector. “Under existing laws and regulations,” the USPS itself says in its 2018 financial plan, “our business model is broken.”

Trump doesn’t seem particularly interested in the Postal Service, even though he recently issued an executive order establishing a task force to investigate the service’s finances. Trump’s real beef is with e-commerce giant Amazon, which, he claims, rips off the Postal Service by getting cheap rates for package delivery. Trump doesn’t really care about Amazon, either, except for its CEO, Jeff Bezos, who also happens to own the Washington Post, a frequent Trump critic. Stitch it all together, and Trump has ordered an investigation of the US Postal Service because he hates the Washington Post.

Anyway, Trump’s task force will no doubt discover many flaws in the postal business model that are already well known. First, the Postal Service is extremely limited in how it does business, because of laws that require it to operate in certain ways determined not by free-market principles, but by Congress. Postal carriers are required to visit virtually every address in America six days a week, with a price cap on first-class mail, the USPS’s main source of revenue. The number of addresses goes up every year. The amount of regular mail consumers buy postage for goes down every year. Kindergarten math explains the basic problem

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Linda Wojcik Lees

3 day a week delivery? Privatize? By reading the full article, most of us would be out of a job.

Maurie Powell

“Package delivery, which is where Amazon comes in, is actually a bright spot for the USPS. Revenue is rising—thanks to Amazon and other e-commerce sites—and the USPS is required by law to earn at least a small profit on its contracts to deliver packages.” How about the USPS earn a nice profit on packages? Why does it have to be “at least a small profit”?

Mary Wackler

Lord knows…that if we made a “nice profit”… it would not trickle down to the carrier…
It would all end up in managements pocket…as usual…

Maurie Powell

Mary Wackler i want a personal profit. I’m tired of working for free.

Mike Shue

Because by law, per the Postal Reorganization Act of 1970, USPS is to be a non-profit organization meant to break even. It was generally considered break even over a 3 year period.

Maurie Powell

Mike Shue profiting on parcels doesn’t mean the whole system is profitable, just a little close to breaking even.

Keith Blanchard

Hey!!! Does this mean they will pay first class for political mail now. !!!! So we are not there cheap delivery boy.

Skip

“…how to fix the US Postal Service, …Or better yet, ask the Postal Service itself.”
Seriously??…

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