01 Jan 2012 Snail Mail’s Slow Death by Government Intrusion, by Sean Turner

The ubiquity of email, social networking websites and other factors are causing a steady decline in the number of people using the services of the 236-year-old U.S. Postal Service.

As banks, credit card and utilities companies increasingly offer online payment options, people frequently pay bills without using the USPS.  The result has been a decrease in first-class mail volume from 104 billion in 2001 to 73.5 billion in 2010, with further decline expected over the next decade.

Many groups, including the National Association of Letter Carriers, urge Congress to take action to save the USPS from an impending demise.  In 2006, Congress acted by passing the Postal Accountability and Enhancement Act (PAEA) to inhibit the USPS’s ability to increase rates and obligate them to prefund 75 years worth of future health care benefits to retirees over a ten-year period.

How an organization with a $5 billion budget shortfall (and growing) is expected to fund such benefits is beyond me — and apparently beyond the USPS as well.

Recently, USPS officials announced a $2.1 billion cost savings proposal that calls for the closure of over half of its mail processing centers, the initial elimination of 28,000 jobs and ending overnight first-class mail.  This is on top of plans to cease Saturday delivery and increase first-class mail delivery times.  But these are mere band-aids on a hemorrhaging quasi-government institution.

Representative Peter DeFazio (D-OR) recommended that “this so-called postmaster general should be fired because of a lack of any imagination or initiative.”  Congress should look in the mirror, as the initiative it should undertake is the elimination of government interference with the USPS. Congress should allow the mail to function like a private business.

Congress should consider repealing the PAEA, giving the USPS the freedom to determine adequate postal rates and a sustainable level of funding of retiree benefits.  Next, Congress should eliminate the USPS’s monopoly status by nullifying the Private Express Statutes — federal laws that, with few exceptions, make it illegal for anyone other than the USPS to deliver letters for less than what the USPS charges.

Regulating postage pricing and pensions and protecting the USPS’s monopoly status has failed to save it from a slow and painful death.  Meanwhile, companies such as UPS and FedEx demonstrate the ability to provide postal services without direct government interference.

More government interference and taxpayer money won’t return the USPS to its former glory.  The focus should be on the thousands of USPS employees rather than giving a fading institution life-support.  What would better serve those employees is the availability of competition to provide postal services at market-driven prices based on basic economic principles of supply and demand — leading to new jobs and better services outside of the USPS.

In short, government needs to step aside and let the marketplace handle what the USPS cannot.

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Sean Turner, a member of the Project 21 leadership network, is a freelance writer.  A version of this commentary previously appeared in The Washington Times. Comments may be sent to [email protected].

Published by the National Center for Public Policy Research. Reprints permitted provided source is credited. New Visions Commentaries reflect the views of their author, and not necessarily those of Project 21, other Project 21 members, or the National Center for Public Policy Research, its board or staff.