Tuesday, May 28, 2013

The Next Big Thing: New Poll -- What Is The Future Of The US Post Office?

The LA Times is reporting: US Postal Service "on its last legs"--
But his future, and that of the U.S. Postal Service, is in doubt. The Postal Service lost $1.9 billion between January and March, and $15.9 billion last year. The 238-year-old institution loses $25 million each day, and has reached its borrowing limit with the federal Treasury. Daily mail delivery could be threatened within a year, officials say.
And it goes on:
Postmaster General Patrick Donahoe has reduced staff, consolidated mail facilities and lowered express delivery standards in an effort to cut spending. But the savings have not been enough to match the drop in revenue.
"We are in real trouble, and we need comprehensive postal reform yesterday," Mickey Barnett, chairman of the Postal Service Board of Governors, told a congressional committee last month.
The Postal Service is a government corporation, which means it is organized like a business yet subject to congressional oversight. Consequently, reform is difficult, said Mike Schuyler, a fellow at the Washington-based Tax Foundation who has studied postal issues for nearly two decades.
Some argue that it's a manufactured crisis with the requirement that the USPS "pre-fund" its health care program for retirees 50 years in advance.

This is an old story and getting older. The USPS reached its borrowing limit some time ago, and yet nothing seems to have changed. The USPS is an independent agency of the US government (whatever that means), according to wiki.

Is the USPS too big to fail?

Behind closed doors in Washington folks are working on plans to keep the USPS afloat. No doubt the first data point folks are shown on the PowerPoint presentations:
Article I, Section 8, Clause 7 of the United States Constitution, known as the Postal Clause or the Postal Power, empowers Congress "To establish Post Offices and post Roads."
No doubt the second data point folks are shown:
The Postal Reorganization Act of 1970 abolished the United States Post Office Department, a part of the cabinet, and created the United States Postal Service, a corporation-like independent agency with an official monopoly on the delivery of mail in the United States. Pub.L. 91–375 was signed by President Richard Nixon on August 12, 1970.
It doesn't take a rocket scientist to see where this is headed. I think before the end of the current administration, there will be serious talk of making the postal service part of the federal government again, either at cabinet level, or more likely absorbed by one of the existing departments, most likely the Department of Homeland Security or less likely, the Treasury Department.


Time for a new poll, mostly because I'm just tired of seeing the same poll day after day.

First the results of the current poll in which readers were asked, which will occur first:
  • decision on the Keystone XL: 44%
  • serious discussion of impeachment: 56%
Now, the new poll. The USPS is broke and getting "broker" every day. The USPS is "too big to fail."

There are only four options. Which is more likely?
  • grand reform resulting in USPS solvency
  • status quo (Congress keeps funding with continuing resolutions)
  • reverts back to cabinet-level department of US government
  • absorbed by another cabinet-level department (e.g., Homeland Security)


  1. If your business is losing money you have essentially two choices;

    1. Increase revenue (higher price and/or volumes).
    Unfortunately, volumes have fallen due to email taking away the low end business, and competition by FED-EX, UPS, taking away the high end business. Further Congress must sign off on rate increases. Since they want to keep them low rates increase a few pennies at a time.

    2. Or you reduce expenses (infrastructure of personnel).
    Unfortunately proposals to close tiny rural PO's are killed by local Congressional pressure. Proposals to consolidate the USPS sorting facilities are killed by local Congressional pressure. Proposals to cut labor expense (such as no Saturday home delivery) is opposed by their labor union which generates national Congressional pressure to kill the proposal.

    In short, the US Postal Service is caught in a perpetual hell created and sustained by Congress. The USPS will be stuck in this mess until it is given more autonomy (so don't hold your breath).

    1. It will be interesting to see how the poll turns out.

  2. Bruce, some interesting stats for the month of May. (Probably April but posted on the site in May) Williams county is the 8th largest county in the state by population, but yet has the 3rd largest workforce in the state by county. Williams county beats out Grand Forks and Ward by 7,000 to 10,000 and less than 4,000 under Burleigh county. Pretty impressive numbers to say the least.


    1. Interesting. I put this in a stand-alone post so that it is easily searchable. Thank you.