Feature

Crisis at the Postal Service

The post office is on the verge of bankruptcy and may have to shut down, unless Congress permits cost-cutting measures.

The postmaster general warned this week that the U.S. Postal Service was on the “brink of default,” and would shut down next year unless Congress allowed it to downsize. USPS chief Patrick Donahoe told a Senate committee that the agency couldn’t make a $5.5 billion payment due at the end of the month to fund future retirees’ health benefits. Missing that bill wouldn’t spell immediate disaster. But early next year, the agency would run out of money to pay employees, forcing it to stop delivering the 3 billion pieces of mail it handles every week. Donahoe said he didn’t want “taxpayer money” to bail out the agency, which will run a $9.2 billion deficit this year. Instead he asked Congress to approve a series of major cost-cutting measures—including ending Saturday delivery, closing 3,650 post offices, and laying off 220,000 workers. The White House said that it was working on a plan to save the service from insolvency, and would ask Congress to allow a three-month delay of the $5.5 billion payment.

The USPS’s revenues have been badly hurt by the rise of e-mail and online billing, said The New York Times in an editorial. But lawmakers haven’t helped. Congress has repeatedly shot down the service’s attempts at cost-cutting, out of fear that ending Saturday delivery and closing post offices would upset voters. Congress should now “work for the common good” by finally giving the USPS a “chance to modernize.”

Why bother? said Kevin Williamson in NationalReview.com. Thanks to e-mail, Americans “no longer need a centralized federal monopoly” to deliver written messages. The emergence of private couriers like FedEx and UPS has rendered postal package deliveries obsolete. Now that the only thing the Postal Service delivers is junk mail, it’s “selling a product that nobody wants.” The “USPS had a good run,” but it’s time to let the dinosaur die.

Or better yet, to make it much more useful, said Felix Salmon in Reuters.com. We should allow the USPS to provide financial services at its many branches, as its European counterparts do. American banks are “mistrusted and disliked” by much of the population, so I’m sure “many people would love to be able to do their banking at the post office instead.” The current crisis offers a rare chance to radically revamp the USPS. “Let’s grab it, before it’s too late.”

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