The U.S. House of Representatives is considering a bill that would allow the struggling U.S. Postal Service (USPS), a quasi-government agency, to expand its government-granted monopoly into banking and delivery services.
In July, the House Government Reform and Oversight Committee approved House Resolution 5714, the Postal Service Reform Act of 2016.
If approved by Congress and signed into law, the bill would allow USPS to increase prices of postal services and expand its services to include grocery delivery, banking and financial services, and other “nonpostal products and services” currently provided by private-sector businesses.
In fiscal year 2015, USPS spending exceeded revenue by $5.1 billion, and the organization defaulted on approximately $5.9 billion in government pension payments promised to employees. In total, USPS has accumulated a total net loss of about $57 billion over the past eight years.
‘Dire Financial Situation’
Michi Iljazi, a policy manager for the Taxpayers Protection Alliance, says USPS must be reformed right away, and the House proposal is the wrong way to do so.
“The USPS is in a dire financial situation, and it is getting worse every month,” Iljazi said. “The agency has lost $36.6 billion in the last five years.”
Iljazi says Congress should change the USPS leadership team.
“There is a lack of accountability, and the Board of Governors currently has several vacancies,” Iljazi said. “This bill would just get rid of those seats, leaving us with the same leadership that has failed, instead of bringing in new leaders with new ideas.”
Questions Need for Expansion
Justin Sykes, federal affairs manager for Americans for Tax Reform, says the bill would make USPS’ monopoly on mail service even worse for consumers.
“As part of the reform bill, the Postal Service is allowed to increases rates on monopoly products such as stamps, ironically the very products that generate the bulk of USPS profits,” Sykes said. “Such a move will only increase consumer costs and drive even more users away from USPS products and services, in turn reducing revenue the Postal Service desperately needs.”
Focusing on the Job
Sykes says lawmakers should concentrate on making USPS a lean, mean, mail-delivering machine.
“Alternatively, lawmakers should instead focus solely on reforming USPS’ operating efficiency and improving the Postal Service’s core mission of mail delivery, reducing waste and reining in costs,” Sykes said. “It is currently the case that the bottom 4,500 USPS locations average roughly four customers per day. Increasing rates on consumers and shifting to non-postal products and services will not solve such issues and would instead serve as only a distraction from the basic reforms needed.”