The Times has an editorial today about the future of the U.S. Postal Service:
Postal officials say they must close about 3,700 underused post offices (there are 32,000 nationally) while offering alternative services through local businesses. They also want to consolidate hundreds of regional processing centers and eliminate Saturday mail deliveries.
An aide to Sen. Bernie Sanders of Vermont was warning me about this last week. There are organic reasons for all of this: The U.S. Postal Service is staring down the same barrel trained at our magazine and newspaper businesses, i.e. its revenue model is being wiped out by the internet.
But politics also plays a huge part in this. In 2006, in what looks like an attempt to bust the Postal Workers’ Union, George Bush signed into law the Postal Accountability and Enhancement Act of 2006. This law required the Postal Service to pre-fund 100 percent of its entire future obligations for 75 years of health benefits to its employees – and not only do it, but do it within ten years. No other organization, public or private, has to pre-fund 100 percent of its future health benefits.
“No one prefunds at more than 30 percent,” Anthony Vegliante, the U.S. Postal Service’s executive vice president, told reporters last year.
The new law forced the postal service to come up with about $5.5 billion a year for the ten years following the bill’s passage. In 2006, before those payments kicked in, the USPS generated a small profit. Not surprisingly, the USPS is now basically broke.
The 2006 law also bars the Postal Service from offering “nonpostal services,” which means the USPS can’t, say, open up a bank, or an internet cafe, or come up with any new entrepreneurial ideas to generate new income, as postal services do in other countries.
The transparent purpose of this law, which was pushed heavily by industry lobbyists, was to break a public sector union and privatize the mail industry. Before the 2006 act, the postal service did one thing, did it well, and, minus the need to generate profits and bonuses for executives, did it cheaply. It paid for itself and was not a burden to taxpayers.
Post offices also have a huge non-financial impact: In a lot of small towns, the post office is the town, and shutting them down will basically remove the only casual meeting place for people in mountain areas and remote farming villages and so on. Of course, there’s always one Wal-Mart for every dozen or so post offices, so people I guess can drive the extra twenty miles and meet there …
This is a classic example of private-sector lobbyists using the government to protect its profits and keep prices inflated. Sen. Sanders is pushing a bill that would delay the end of Saturday delivery for two years, and prevent a number of post-office closings, but the writing is on the wall, unless there’s a public outcry. So definitely write your congressman and ask him to roll back Bush’s idiotic law, and at least give the Post Office a chance to sink or swim on its own.