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FOUNDATION
December 4, 2012
No. 206
Is the Postal Service Like Greece?
By
Michael Schuyler, Tax Foundation Fellow
Introduction
At the PostalVision 2020 Conference earlier this year, Postmaster General Patrick Donahoe compared the
U.S. Postal Service to Greece. If we don't do something about the costs of this organization, we will look
like Greece.... We need less expensive work hours, and we need more flexibility on who can do what jobs.1
Several days later, the postmaster general repeated the analogy in an interview with Federal News Radio.
Look what's going on in Greece.... The key for us [to avert a Greek-style disaster] is this: Provide great
service... at a very reasonable cost.2
In using Greece as a cautionary example, Mr. Donahoe probably had multiple objectives: reconcile
stakeholders to the need for operational changes at the Postal Service, dissuade Congress from blocking
adjustments that the Service can make under current law, and prod Congress to enact the Service's legislative
agenda.
Although the postmaster general has made the Greek analogy only a few times in passing, the topic is worth
considering in more detail. Greece's disastrous experience holds valuable lessons, applicable to the Postal
Service, regarding the dangers of large and persistent deficits and the desirability of addressing financial
problems sooner rather than later.
Even without the postmaster general's comments, the Greek analogy would have come to mind on August
1, when the Service defaulted on a legally required $5.5 billion contribution to the Retiree Health Benefits
Fund (RHBF) at the U.S. Treasury. The payment had originally been due in 2011, but Congress extended
1 SeeAngela Greiling Keane, Postal Service to 'Look Like Greece' Without Aid, Donahoe Says, BLOOMBERG, June 12, 2012,
http://xww.bloomberg.com/news/2012-06-12/postal-service-to-look-like-greece-without-aid-donahoe-says.html. See also Emily
Stephenson, U.S. Postal Service going way of Greece, chief says, REUTERS, June 12, 2012,
htp://www.reuters.con/assets/priit?aid=USBRE85B 1 GQ20120612.
2 See Ruben Gomez, Postal Service Saves Billions Too Little, FEDERAL NEWS RADIO, June 20, 2012,
htp://www.federalnewsradio.com/idex.php?nid= 851 &sid=2426982.
' See U.S. Postal Service, Postal Service Statement On Retiree Health Benefits Payment, POSTAL NEWS, July 30, 2012,
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