By Matthew Paxton IV, publisher of The News-Gazette, Lexington, VA, and
president of the National Newspaper Association
The U.S. Postal Service last received a major overhaul by Congress in 2006. The next year, Steve Jobs appeared on a stage with a new gadget called an iPhone. The world was changed forever.
Since then, Congress has been grappling with the tough question of funding a system that must reach ever more mailing addresses in America, but with less mail to pay for the service. Even though postage pays for the system today, the buck ultimately stops with those elected to preserve it.
So far, Congress has done nothing but tinker with the challenge.
Major legislation has been proposed in every congressional session since 2007. Each time, it has died.
This is nothing new. Since the birth of the nation, Congress has had a tough time deciding how to pay for this essential service, which once expanded the frontier with stagecoach lines by loading up the wagons with profitable mail.
Today, despite the fact that First Class Mail is gravitating to the Internet for bill payment and personal correspondence, the mail still stands behind $1.3 trillion in economic activity. A person might think with this much money on the line, Congress could get moving. USPS has a $57 billion deficiency on its balance sheet, largely because of burdens created by Congress itself. But Congress still has not acted. Unless something lights a fire under the House of Representatives leadership this fall, another year will go by without a solution.
About four years ago, most of the nation lost its right to overnight First Class Mail, as the postmaster general had to cut money from the operating costs.
That might not seem so bad in an Internet age, but what it really meant was that everything slowed down including Periodical newspapers. Businesses that count on cash from payments in the mail—and that is most small businesses—found the money coming in a little slower, and sometimes causing them to have to tap credit lines. Newspapers like this one that rely on the mail to deliver the news began to field calls from disappointed subscribers whose newspapers showed up late or in batches of two. Or 10. Critical medicines delivered to patients had to be ordered earlier, or were delivered later. Consumers could easily miss a payment deadline in the slower remittance delivery, and suffer in their credit scores.
Some in Washington thought ending Saturday delivery was the answer—but that would have harmed rural America even more.
Now, USPS’ financial losses this year are accelerating—more than $2 billion as of June. Postmaster General Megan Brennan will not say publicly when she expects to run out of money, but a day will come soon when hard choices must be made between meeting payroll or shutting down more post offices and mail sorting plants.
There is a solution that buys USPS time to continue adapting to the new digital world without costing Americans access to services. A bill was sent to House Ways and Means Committee last March by another committee responsible for overseeing USPS. It is now sponsored by one Republican, Rep. Mark Meadows of North Carolina, and three Democrats who are experts in postal matters: Reps. Elijah Cummings of Maryland; Gerald Connolly of Virginia; and Stephen Lynch of Massachusetts. That this group, who agree on little else, could come together says a lot about this bill.
The legislation would require about 77,000 postal retirees to use Medicare instead of a separate federal benefits fund. Medicare taxes were paid for these workers (funded by postage), but Medicare has been able to salt away that money, subsidizing other benefits with those payroll deductions. The bill would cost Medicare about $10 billion–worth about a week’s normal Medicare enrollment--that it would have to pay anyway if these workers elected the benefits they are already owed.
The carrot in the bill is a federal deficit reduction of $6 billion, because commercial mailers would shoulder a modest rate increase. A Congress always looking for ways to cut the deficit should leap at the opportunity.
If the bill passed, USPS would save about $30 billion over 10 years.
Why isn’t the bill moving? For the same reason anything else in Washington is bogged down. People cannot agree. Some members of Congress worry about making Medicare pay out these benefits even while they support changes in Obamacare that would have far greater impact. Some dislike the modest commercial postage increase mandated in the bill. Postal unions support the Medicare provisions, but the larger retired federal employees’ groups don’t want to lose the subsidy for other benefits. In addition, some political wonks want to sell the Postal Service and hope that somehow the private sector can do the job—even though America’s vast rural areas would be underserved by a private contractor.
Some members of Congress simply cannot make up their minds, seeing no urgency.
But the situation already is urgent. Waiting until more Americans loseservices will be too late and further weakening small town economies and small business is no answer. Unlike the knotty problems of health care and tax reform, this legislation is a fairly easy fix. Speaker Paul Ryan should get it moving in September, and notch a victory while working on the really tough issues.
If you are concerned about losing more mail service in rural America, the way to protect it is to contact your representative and ask for a big push for HR 756. will take you to a message page for your member of Congress.