Two reports out now about the U.S. Postal Service (USPS) mean that taxpayers have an even bigger stake in how policymakers protect them from a potential bailout of the quasi-governmental entity. As USPS released its 3rd-quarter financial statement showing a near $1.5 billion loss and the Task Force on the U.S. Postal System transmitted its report to the White House, National Taxpayers Union (NTU) President Pete Sepp issued the following statement.
In tennis, the number of unforced errors is a very compelling measurement of performance. So it is with many of USPS’s financial woes.
The Service may be touting a net loss for its just-concluded 3rdquarter that’s 30 percent lower compared to the same period in 2017, but a great deal of the difference can be explained by lucky breaks in workers’ compensation and pension liabilities. When accounting for those factors, USPS’s controllable loss is up 51 percent versus the 3rdquarter of last year.
That luck won’t hold out forever. Demographic changes will inflict ‘forced errors’ on USPS’ compensation systems in similar ways to other private and public pension or health care arrangements. Meanwhile, unforced errors continue to accumulate, with many attributable to lack of transparency in operations and business model decisions. Taxpayers are rightfully concerned that they will be paying for cleaning up the fiscal debris left on the court.
Unfortunately, USPS isn’t the only player on the public-policy court that is capable of committing both forced and unforced errors. Members of Congress have proposed a variety of schemes – such as involving USPS in banking and shifting retirees into Medicare – that could have unforeseen consequences for taxpayers.
Policymakers inside and outside of Congress have proposed more rate flexibility. Allowing USPS to charge customers whatever it wants for services like letter mail would seem justified, except that those ‘customers’ are often captives – some lines of postal business are granted a legal federal monopoly. As long as this situation exists for a part of USPS’s operations, policymakers have a special responsibility to ensure that those rates are set transparently and equitably.
Hopefully the White House’s internal review of the Task Force on the U.S. Postal System’s report will conclude soon, so taxpayers will have new hope for reforms that allow USPS to recover from its poor financial condition and become sustainable over the long term. Everyone concerned about consumers, taxpayers, and the evolving economy should be able to agree that USPS needs a change in direction. That change will require leadership not only from Postal management but also from Congress, the Treasury, and the Postal Regulatory Commission.”
For decades NTU has analyzed USPS’s challenges and articulated reforms that can protect taxpayers as well as serve customers. Further information is available online at ntu.org.