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Columbus Dispatch...
Congress should act
Without lawmakers’ OK for reforms, Postal Service can’t make ends meet  
September 26, 2011 

The U.S. Postal Service faces huge barriers to solvency, with a service that has been profoundly undermined by competition and labor agreements that bloat its costs. But it remains too important to allow it to slide into default, as officials suggest could happen as early as this winter. 

Instead, the Postal Service will have to change radically to survive, but it can’t do that without intervention from Congress. Feuding partisans in that institution should come together to find a solution. 

So far, at least two bills have been introduced. One from Reps. Darrell Issa, R-Calif., and Dennis Ross, R-Fla., would make deep cuts in postal services. Another, sponsored by Democratic Reps. Elijah E. Cummings of Maryland and Stephen F. Lynch of Massachusetts, aims to return the Postal Service to profitability by allowing it to branch into new services. 

As omnipresent as email, social media and Internet shopping are in American life, millions of people still count on being able to mail an actual paper letter for 44 cents, not to mention receiving deliveries to their front doors six days a week. People in rural areas depend on the post office to deliver prescriptions, newspapers and other essentials. 

The service is teetering on the edge of fiscal disaster, with an operating deficit that will reach $9.2 billion this year. It won’t be able to make a $5.5 billion payment on retirees’ future health care, due on Sept. 30. If things don’t change, by early next year it could find itself with no money to pay employees or put gasoline in trucks. 

The problem stems from two directions. The rise of email, online bill-paying and online catalog shopping have taken away a huge source of postal revenue. The service will handle about 167 billion pieces of mail this year, down 22 percent from five years ago. Projections suggest that could drop to 118 billion pieces by 2020. On the cost side, the Postal Service is burdened by labor contracts that are generous even by public-employee standards. As a result, labor costs eat up 80 percent of the Postal Service budget, compared with 53 percent at United Parcel Service and 32 percent at FedEx. No wonder it can’t compete. 

Some post-office supporters also say that it is unreasonably burdened by a 2006 law requiring it to pre-fund 75 years’ worth of current and future retiree health benefits over a 10-year period. 

The changes advocated by Postmaster General Patrick R. Donahoe — laying off 120,000 workers, reducing pay and benefits, cutting Saturday delivery and closing 3,200 lesser-used post offices, to name four of the most unpopular — will require political courage, because they go against union contracts and upset voters around the country. 

Postal officials have other moneymaking or moneysaving ideas that would be less controversial, such as allowing the postal service to expand its offerings by having banks in post offices, delivering wine and beer and allowing ads on postal trucks. Others have suggested making up for the loss of closed offices by offering some postal services in grocery stores or other establishments. 

With some creative restructuring, the Postal Service could evolve into a very different agency, while still providing the essential delivery service to those Americans who want and need it. 

But the Postal Service won’t survive without the painful rightsizing that the rise of the Internet has made necessary. And it can’t make needed changes without approval from Congress. 

Read it at the Columbus Dispatch

 

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