The U.S. Postal Service vs. Congress

Congress continues to look for cuts to lower the U.S. budget deficit. The Postmaster General wants Congress to allow him to shave expenses from the Postal Service cost base to save money. Taxpayers will have to pay more to bailout the USPS if those cuts are not made. The situation is a maddening example of why deficit reduction does not work.

Postmaster General Patrick Donahoe recently commented on bills that members of Congress have drafted to help cut the service’s red ink. He says they do not go nearly far enough. “Taken as they are, they do not come close to enabling cost reductions of $20 billion by 2015 — which they must do for the Postal Service to return to profitability,” Donahoe said in a speech. He accused Congress of pushing the hard decisions about Postal Service cuts well into the future. That sounds quite a bit like plans, or lack of plans, to cut Social Security and Medicare. Legislators want the next generation of Congress to do the right thing, which almost certainly will be the unpopular one.

The Postmaster wants powers that any company CEO has. Donahoe wants to be able to eliminate Saturday delivery, cut health care and retirement costs and have more flexibility in what the Post Office can do, beyond mail delivery, to make money.

It is hard to say why Congress probably will shirk the opportunity to save what could be billions of dollars in federal expenditures. Perhaps members believe there will be a voter backlash if the number of delivery days is cut. Perhaps some are worried that the powerful American Postal Service Workers Union will mobilize voters to try to block the reelection of some Congress members. Each of these is a risk, but not of the scale of voter reaction to cuts in Social Security and Medicare.

If Congress cannot address the problems of the Postal Service deficits, it is a clear sign that larger deficit problems will go untouched.

Douglas A. McIntyre