Lawmakers Debate Post Office Entitlement Changes, Reorganization

Published February 15, 2016

Members of Congress are developing a plan to shift and reorganize costs incurred by the struggling U.S. Postal Service (USPS) in an attempt to reform the quasi-government agency’s operations.

In fiscal year 2015, USPS spent $5.1 billion more than it collected in revenue, and it has continued to default on entitlement payments for retired employees.

The U.S. Senate Committee on Homeland Security and Governmental Affairs, chaired by Sen. Ron Johnson (R-WI), heard testimony on January 21, about legislation that would reform USPS, Senate Bill 2051, by shifting retirees’ health care entitlement programs into taxpayer-funded programs such as Medicaid. SB 2051 would also change the process through which underutilized post offices are closed or reorganized.

Richard Geddes, an associate professor at Cornell University’s Department of Policy Analysis and Management, says lawmakers’ current plan is a bad idea.

“It’s not a reform bill,” Geddes said. “I’m really quite surprised. This doesn’t sound like reform at all.”

Mixed Messages from Congress

Geddes says lawmakers want it both ways when it comes to USPS oversight.

“They tell the Postal Service on one hand, ‘You’re supposed to operate like a private business and use business principles,'” Geddes said. “On the other hand, they say, ‘Oh, wait, we are going to straitjacket you in certain ways. You cannot decide which post offices to keep open, which to close, and where to put them to optimize your network, because we, Congress, are going to make those decisions.'”

‘Worse than a Band-Aid’

James Gattuso, a senior research fellow at The Heritage Foundation’s Roe Institute for Economic Policy Studies, says the proposed reforms would make the problem worse, not better.

“It is worse than a Band-Aid,” Gattuso said. “This legislation would actually diminish USPS’ ability to reform by placing moratoriums on closing unneeded facilities and consolidating services.

“Banning the closure of post offices is exactly the wrong thing to do,” Gattuso said. “USPS needs to downsize. Mail is shrinking, leaving USPS with far too much infrastructure. The problem, of course, is that no congressman wants any post offices in their district closed. That illustrates the problem with government ownership of USPS.”

Andrea Dillon ([email protected]) writes from Holly Springs, North Carolina.