U.S. Postmaster General Patrick Donahoe minced no words Tuesday in a meeting with members of a Senate committee on Tuesday. Without Congressional action, Donahoe told the lawmakers, that the Postal Service will default on a multibillion dollar payment due the U.S. Treasury this month and that it could run out of money to operate sometime next year. Congress should not allow either to occur.
The Postal Service's problems are well documented. The agency has been hammered by the economic slowdown and by the continuing consumer shift from first-class mail to email. The situation is dire. The Postal Service lost $8 billion last year and could lose that much or more this year -- despite job cuts and local post office closures. Clearly, some remedy is in order.
Congress holds the key to restoring a bit of fiscal stability to the Postal Service. While it does not provide funds to operate the post office, it has considerable say in how it operates. Congress mandates, for example, that the agency provide universal service, certain employment rules and that it prepay retiree health benefits. The Postal Service does not have the money to meet the latter requirement, a payment of $5.5 billion due by the end of this month.
Even if the Postal Service could make the payment, that wouldn't end the crisis. The agency still needs to cut other costs. That's difficult given the agency's mandates and the political pressures it faces from lawmakers, especially rural ones, to maintain unprofitable post offices and from big business that has a vested interest in keeping mailing costs, especially for bulk mail low.
Balancing such competing interests -- consumers, politicians, big business -- would be hard at any time. It is especially difficult in the current partisan atmosphere in Washington. There is some bipartisan support for remedies to help the Postal Service, though even the most ardent backers of such legislation admit they are mostly short-term solutions to a long-term problem. A broader view is needed.
Donahoe told the Senate committee that the Postal Service doesn't want taxpayer money. He said he wanted to get the agency's finances in order. That's the right approach, but Congress needs to help by helping to develop plans to streamline the service, even if it includes closing posts offices and reducing delivery days. Whether legislators are willing to do so remains to be seen. If they treat the looming Postal Service crisis like they did the debt-ceiling debate, then the Postal Service and all who still depend on it are in trouble.