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

282 IRET Congressional Advisory 1 (2012)

handle is hein.taxfoundation/iretcgadv0279 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. March 30, 2012 Advisory No. 282 Why The U.S. Postal Service Is In Greater Financial Trouble Than Most Foreign Postal Services - The Role Of Government Micromanagement Executive Summary Postal services throughout the world have lost sales due to electronic diversion and suffered from the last recession and its after-effects. Nevertheless, the majority of foreign posts in upper- and middle-income nations that report their financial results to the Universal Postal Union (UPU) are profitable. While many occasionally lose money, few stay in the red year after year. This evidence demonstrates that postal services can continue to deliver the mail and provide the public with reasonable postal access while remaining financially viable. The U.S. Postal Service, though, has lost money in every year since 2007 and foresees deepening losses. What differences explain USPS's losses? Looking to foreign best practices, what could be improved? This paper examines one crucial difference: government micromanagement, which has saddled the U.S. Postal Service with excess operating costs. Later papers will investigate three other differences: retiree health care expenses, postal pricing, and nonpostal diversification. Foreign posts have much more flexibility than USPS to adjust operations to keep costs in line with revenue. For instance, foreign posts often lay off unneeded workers; many have moved to five-day delivery; and many are shifting to partner-owned post offices. In contrast, when the U.S. Postal Service attempts to modify its operations, statutory restrictions and Congressional pressure often slow its adjustments or block them entirely. In some cases, the Service's own missteps have also hurt its efforts. Until a few years ago, mail demand was sufficiently high that the U.S. Postal Service could bear heavy unfunded mandates and still be financially self-sufficient. That is no longer true. A politically difficult but vital reform is to stop imposing mandates on the Postal Service that are not closely related to the agency's core mission of mail access and delivery. Some of the dramatic service changes USPS is now proposing are an unfortunate result of Congressional barriers to less disruptive adjustments. This suggests that Congress should also be cautious about standing in the way of changes that, although having some negative impact on service quality, would yield major costs savings and do less harm than the alternatives. This does not mean letting USPS do whatever it wants. Congress and the Postal Regulatory Commission (PRC) should continue to closely monitor the Service's actions to be sure it upholds its universal service obligation (USO) and does not abuse its statutory mail monopoly.

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