About | HeinOnline Law Journal Library | HeinOnline Law Journal Library | HeinOnline
LOG IN
LOG IN

175 IRET Congressional Advisory 1 (2004)

handle is hein.taxfoundation/iretcgadv0172 and id is 1 raw text is: INSTITUTE FOR RESEARCH ON THE ECONOMICS OF TAXATION IRET is a non-profit 501 (c)(3) economic policy research and educational organization devoted to informing the public about policies that will promote growth and efficient operation of the market economy. June 8, 2004 Advisory No. 175 WOULD PROPOSED POSTAL SERVICE LEGISLATION HELP BRING DOWN COSTS? Executive Summary The House Committee on Government Reform unanimously sent to the House floor The Postal Accountability and Enhancement Act (H.R. 4341), and the Senate Committee on Governmental Affairs, also unanimously, sent to the full Senate a bill with many similarities but some differences (S. 2468). These bills would significantly change the legal framework under which the government-owned Postal Service operates. This paper examines whether the proposals would help the Postal Service deliver mail at lower cost. High costs have troubled the Postal Service throughout its existence and are the main reason for its chronic financial problems. Especially useful would be reforms that scale back statutory restrictions where they conflict with best business practices and that better insulate the Service from political pressure. A panel modeled on successful military base closing and consolidation commissions would help the Postal Service rationalize its inefficient facility network. The bills, instead, opt for the weaker alternative of letting the Service send Congress a report offering a plan the agency would develop. There is much evidence that a large postal pay premium exists, relative to compensation in the private sector. Because over three-fourths of the Service's costs are labor related, narrowing the premium could save billions of dollars yearly. H.R. 4341 and S. 2468, however, largely avoid this issue. S. 2468 does call for trimming disability benefits, which is a sensible reform. H.R. 4341, though, could hinder future efforts to control labor costs by reserving for a postal-union nominee one of the seats on the Postal Service's Board of Governors. The bills would save the Service several billion dollars yearly by reducing its contributions towards pension benefits. First, the bills would end an escrow account now that Congress is satisfied regarding how the funds would be used. More controversially, a provision opposed by the Office of Personnel Management and the Treasury would shift certain pension liabilities from the Postal Service to the Treasury. Although that within-government transfer would lower the Postal Service's costs, it would not be a cost saving for the government as a whole. With regard to reducing costs through greater efficiency and less waste, the bills are disappointing. A few small steps in the right direction are included, but big reforms are lacking. Other provisions of the bills, some quite worthwhile, will be reviewed in later papers.

What Is HeinOnline?

HeinOnline is a subscription-based resource containing thousands of academic and legal journals from inception; complete coverage of government documents such as U.S. Statutes at Large, U.S. Code, Federal Register, Code of Federal Regulations, U.S. Reports, and much more. Documents are image-based, fully searchable PDFs with the authority of print combined with the accessibility of a user-friendly and powerful database. For more information, request a quote or trial for your organization below.



Contact us for annual subscription options:

Contact Us

Already a HeinOnline Subscriber?

Log In

profiles profiles most