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News from EPI › New EPI Report Outlines Four Ways Congress Should Help the U. S. Postal Service Ensure a More Sustainable Future

Press Releases • November 4, 2013

A new report from the Economic Policy Institute shows that the United States Postal Service (USPS) is not near the brink of insolvency. In Heritage’s Ruinous Recommendations for the U.S. Postal Service, EPI Vice President Ross Eisenbrey reviews a recent analysis by the Heritage Foundation, Can the Postal Service Have a Future?, and finds that in addition to misdiagnosing the severity of the USPS’s current financial problems, it has five major flaws. He then identifies four ways Congress can ensure a sustainable postal service, including the repeal of health benefits prefunding and adjustment to its Civil Service Retirement System liabilities.

“The United States Postal Service has reliably delivered mail to every home and business in America for four decades, providing an important public service without taxpayer subsidy,” said Eisenbrey. “Heritage’s analysis is rife with errors and overstates its operating deficit. Implementing Heritage’s recommendations would be disastrous for the USPS and the many millions who rely on its service day in and day out.”

The report finds the following flaws:

  • It fails to recognize the damage Congress itself has done to Postal Service finances.
  • It wrongly supports a disastrous, congressionally imposed prefunding requirement for retiree health benefits.
  • It fails to recognize that the Postal Service’s revenues are recovering from the Great Recession, and that its cost-cutting has been effective.
  • It recommends elimination of the traditional letter-mail monopoly, which would effectively end universal access to mail delivery—the Postal Service’s core purpose.
  • It pretends to support competitive freedom for USPS but would add new restraints.

“Congress might have had genuine concerns about the security of postal retirees, but it elevated them to an indefensible priority over sustaining and improving the Postal Service’s current operations,” said Eisenbrey. “Congress should suspend the prefunding requirement immediately and let USPS devote those funds to better marketing its products, to developing new ones, to improving its vehicle fleet, and to meeting more urgent financial obligations, which would improve the Postal Service’s bottom line by a minimum of $22.8 billion over the years from 2013 through 2017.”

Eisenbrey also recommends more fairly allocating pre-1971 pension obligations between the USPS and the Office of Personnel Management, freeing the USPS from restraints on its pricing, and removing restrictions on USPS offering non-postal services.