FYI: Another blow to USPS

Published 8:00 pm Monday, April 11, 2016

Too bad the federal government can’t wage war on drugs or poverty as effectively as it has against the U.S. Postal Service. Congress keeps coming up with inventive ways to cripple the Postal Service financially — with the latest coming Sunday, when a mandatory rate cut took effect.

If left in place, the cut will cost the Postal Service $2 billion a year, crippling its ability to adapt to new competition and technology.

The Postal Service lost money during the Great Recession. So to close the budgetary gap the Postal Regulatory Commission, the independent regulatory agency that oversees postal services and rates, approved a rate increase in 2014.

The increase boosted the price of a first-class stamp to 49 cents from 46 cents. The commission also required that the increase be rescinded once it generated $4.6 billion in revenue.

The Postal Service hit the $4.6 billion target Sunday. The Postal Service is allowed to take inflation into account in calculating the rollback, so the price of a first-class stamp will be cut to 47 cents.

It will be the first time since 1919 that the price of a stamp has declined.

A rate cut might be welcome if the Postal Service, which funds all of its operations with revenue generated by its services, was generating financial surpluses. And indeed, the service has posted a profit in both of the past two years — or it would have, if it weren’t required to prefund its pension obligations in a way that is required of no other employer, public or private. The pre-funding requirement left the Postal Service with a $5.1 billion loss last year.

Those losses allow the Postal Service’s many critics to characterize it as a dinosaur, crawling toward extinction in the tar pits of email, electronic bill payments and private competition. In fact, the Postal Service has responded to those formidable challenges surprisingly well; it has even become the package delivery system of choice for companies such as Amazon. The fact that the Postal Service would be profitable if it weren’t for the unique burden of pension prefunding is evidence of its ability to adapt to the 21st century.

Americans should be grateful for that adaptation. Despite the proliferation of alternatives, the Postal Service remains the only truly universal delivery system in the country. For 49 cents (or 47 cents, as of today), it will deliver a letter from any address to any address, whether it’s in Marcola or Manhattan. The availability of such a service binds the nation, lubricates the channels of communication and creates a democratic equality among urban and rural areas.

But now comes another $2 billion blow. Americans don’t need the extra pennies — indeed, the rate cut makes those fixed-price “forever” stamps in millions of kitchen drawers worth a bit less.

Congress should allow the Postal Service to charge a break-even price for its services rather than needlessly pushing it toward insolvency. Surely, it’s in no one’s interest to force an essential public service to fail.

— The Register-Guard, Eugene

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