Thursday, December 12, 2013

Congress still hates the U.S. Postal Service

David Goldman/AP
Two Sundays ago I was roused from my midday stupor by the doorbell. I staggered to the door to discover a big box from Amazon deposited on the stoop, and a U.S. Postal Service truck just rounding the corner on its way to make another Sunday delivery. "What the --?" I asked.

The delivery, as I was presently to learn, was the harbinger of the Postal Service's new deal with Amazon for Sunday delivery of the online retailer's packages in big cities. It's a brilliant move that serves both the partners and customers too. It builds on the Postal Service's reach in parcel delivery -- the USPS performs the same last-mile service in many communities for UPS and FedEx -- and provides it with a new source of revenue.
But it doesn't solve the service's most significant problems, which contributed to its $5-billion loss in the latest fiscal year, reported late last week. One problem is the secular decline in first-class mail, which is unlikely to recover its bygone volume.

But the bigger problem is the enduring hostility to the USPS shown by many conservatives in Congress. It's because of them that the USPS has maxed out its statutory borrowing authority and faces an annual payment of $5.5 billion into a health fund for its future retirees. The service defaulted on that obligation last year and this year, but it shows up as a liability on its balance sheet and destroys its financial flexibility.

In real terms it's an obnoxious fiction imposed by a cynical Congress in 2006. Barring the unnecessary healthcare payments, the postal service's deficit would be manageable -- $5 billion is a bit more than one-tenth of 1% of the federal budget.