Efficiency down to the letter

Postal Service is hemorrhaging billions; is privatization an option?
A King George VII-era post box sits in a residential area in London. Great Britain saved government money by privatizing its postal service. It might be worth a look for the United States to consider a similar move.

With a growing list of failed or failing federal programs, it’s easy to overlook the one that visits your home six days a week: the U.S. Postal Service.


Though taxpayers haven’t supported mail delivery since 1971, Congress still controls the Postal Service’s purse strings through stamp rate hikes and by granting it the monopoly on first-class mail delivery.

The federal-employee culture is evident in its inefficient operations, which last year posted a $5 billion loss. Recently a Government Accountability Office official told a House committee that the service ended the last fiscal year $100 billion in debt and with unfunded health benefit liabilities.

“We cannot return the organization to profitability or secure our long-term financial outlook without the passage of comprehensive reform legislation,” Jeffrey Williamson, the service’s executive vice president, told the House Oversight and Government Reform Committee.

You know the situation is dire when the organization itself calls for help.

Can Congress finally muster the courage to turn this bloated organization around?

Past attempts to end Saturday mail delivery and to close post offices and processing plants were met with fierce opposition from the four postal worker unions, which are among the largest donors to the Democratic Party.

A Senate bill with bipartisan support would institute five-day delivery after 2017, close some facilities after two years, and recover overpayments into the federal pension system to address the Postal Service’s two biggest financial liabilities, retiree pension and health care costs.

However, we are less than optimistic legislators will make meaningful changes in this quasi-public organization, since Washington’s version of “reform” usually means “bailout.”

If Rep. Darrell Issa, the Republican head of the House Oversight Committee, really wanted to set the stage for reform discussions, he could invite Moya Greene to make opening statements to the committee. She’s the former Canadian executive who helped Great Britain privatize its 500-year-old Royal Mail service in 2013 after a 40-year battle.

Like the Postal Service, the Royal Mail was also facing reduced mail volume, spiraling costs and lackluster innovation. Now, it’s on the FTSE 100 index of the London Stock Exchange.

Full privatization might be just what the U.S. Postal Service needs. It’s at least worth considering. If it can be done in Britain, it surely can be done here.



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