The Postal Service needs structural reform, not a bailout
The United States Postal Service is going to lose $10 billion this year. Why? It is losing business to e-commerce, and it cannot reduce its expenses fast enough due to legislative mandates and onerous union contracts. Without legislative action, the Postal Service will not be able to meet payroll by next summer. This week, the president finally released his proposal for saving the Postal Service. That the president’s proposal was released as part of his “deficit-cutting” package was Orwellian. That he suggests it would save the Postal Service is absurd.
The White House has confirmed that the president’s proposal on postal reform is nothing more than a taxpayer-funded bailout that increases the deficit, hurts the Postal Service and masquerades as savings through some fuzzy accounting.
The administration has informed the House Oversight and Government Reform Committee that under the normal rules for estimating the cost of legislation, commonly known as “budget scoring,” the president’s plan would not reduce the federal deficit by $19 billion over 10 years as advertised by the White House; in fact, it would increase the deficit by $10-20 billion over that same period. Even worse, administration officials admit that they expect this proposal to prevent the Postal Service from reducing its expenses by $8.5 billion over two years.
That’s right, they expect that the American people will have to pay $20 billion to push difficult reform decisions down the road two years, and that $8.5 billion will be totally wasted.
Today, the Oversight Committee is moving forward the only bill introduced this Congress that would actually solve the problems that the Postal Service faces and return the institution to profitability.
H.R. 2309, the Postal Reform Act of 2011, which Oversight Committee Chairman Darrell Issa and I jointly introduced, would allow the Postal Service to restructure itself and reduce costs by removing unfunded mandates and costly regulations. The cost-cutting structural reforms in the bill would save a bare minimum of $10.7 billion per year, and that is just what we can count.
Under our legislation, if the Postal Service cannot meet its obligations to the U.S. taxpayer, the agency would be placed under a temporary receivership-like authority to overhaul its finances. The costs of the restructuring would be financed by credit fully collateralized by Postal Service property, so there is no risk to the taxpayer. You can read more about our plan at SavingThePostalService.com.
We do not claim that the Postal Reform Act is perfect, and there are certainly other ideas worth considering when it comes to preventing the collapse of America’s second-largest employer. But the president’s proposal has joined a long list of false reform idols that offer a short-term fix to the Postal Service to the detriment of its long-term viability. We do not have any more time to waste playing games with bailouts or wringing our hands about making the tough decisions. The time to act is now, and the only viable plan is the Issa-Ross Postal Reform Act.
Rep. Dennis Ross (R-FL) is the chairman of the House Oversight and Government Reform Subcommittee, which oversees the Postal Service.