Sunday Summary

In what is possibly the saddest result of the boom in technology of the last twenty years is the reduction of physical mail we send and receive.  The reason it is sad, is because, well, as a result, the United States Postal Service is broke.  Flat broke.  If they were a private company, they'd be bankrupt.

As it is with any private company, we say this because the costs to operate the USPS far outweigh the revenue it generates, currently by $9.2 billion.  Like the rest of the federal government, they've lately had to borrow the funds necessary to make its payments, and currently, they've reached their credit limit of $15 billion.  At the end of this month, they expect to default on $5.5 billion that covers future retirees' health benefits.  Hence, they're looking to Congress for some kind of action.

Two causes have brought about the USPS's difficulties.  First, thanks to digital technology such as email and online bill-paying as well as competition from private carriers such as UPS, the federal service has simply lost the volume of business, and the revenue that it generates.  In any private company, such loss of revenue would likely mean downsizing through employee layoffs.  However, and the second and more serious cause of the USPS's plight, because of no-layoff clauses in their contracts with the American Postal Workers Union, they cannot legally lay anyone off.  Moreover, a 2006 law requires the postal service to pay an average of $5.5 billion annually for 10 years to finance retiree health costs for the next 75 years.  Thus, the situation is "extremely serious,” according to postmaster general Patrick R. Donahoe.  "If Congress doesn’t act, we will default.”

Donahoe has proposed some measures to resolve the crisis, but most aren't likely to go over well with a number of folks.  They've already suggested ceasing Saturday deliveries, but such an idea has gotten flak from Congressional Representatives, who argue that such is a serious disruption for those who receive medications and newspapers via snail mail.  They have the legal authority to close facilities, and have proposed doing so, but who wants to lose their local post office?  They don't have the legal authority to layoff employees, so they have asked Congress to enact legislation that would overturn the job protections, but the very idea has enraged the postal workers union.  Cliff Guffey, president of the APWU, has already said, "we’re going to fight this and we’re going to fight it hard."

As Donahoe suggests, this is a serious problem that requires immediate attention.  As one member of an oversight committee put it, "Unless there is real structural reform, the Postal Service won’t be here in two years."  As it is, the funds necessary to even cover the current payroll will be depleted by early next year, and so there is talk of shutting down the service entirely this winter.

Ben Franklin, the country's first Postmaster General, must be rolling in his grave.