Postal Service, Congress must deliver on changes

The U.S. Postal Service needs help – well, a whole lot of money — to save it from what is being called a “financial disaster.” It’s seeking to raise the price of a first-class stamp by 3 cents, which would take it to 49 cents. This is on the heels of a penny increase in January to 46 cents.

Most likely, lawmakers will grant the request.

Most likely, it won’t change the finances of USPS and it will continue to bleed red ink.

The question is, what to do about it.

First, let’s consider this: The Post Office expects to lose in the range of $6 billion this year. Last year, it lost some $16 billion. For many companies, such losses are unsustainable. They couldn’t continue to operate. But the Postal Service does. You know the saying, the mail must go through.

Now, the Postal Service points out that much of its losses are due to the requirement it prepay benefits, which runs around $5 billion a year. Granted, that presents a financial problem and Congress should provide some relief from that law.

Still, and our math may be fuzzy, even if you account for the prepayments, the Postal Service will continue to lose big bucks.

The Postal Service’s Board of Governors, in its rate hike request, cited the agency’s “precarious financial condition” and the uncertain prospects for postal overhaul legislation in Congress.

“Of the options currently available to the Postal Service to align costs and revenues, increasing postage prices is a last resort that reflects extreme financial challenges,” the board’s chairman, Mickey Barnett, wrote customers.

In seeking the increase, Barnett cited “extraordinary and exceptional circumstances which have contributed to continued financial losses” by the agency.

The rate proposal must be approved by the independent Postal Regulatory Commission. If the commission accepts it, the increase would become effective Jan. 26.

Other increases are being proposed, too.

According to news reports, USPS is asking that each additional ounce of first-class mail increase a penny, to 21 cents, while the price of mailing a postcard would rise by 1 cent, to 34 cents. The cost to mail a letter to an international destination would increase 5 cents, to $1.15.

All told, the increases are expected to create $2 billion annually for this agency. Not enough to cover its losses, but it would ease the strain.

Well, we’re not convinced there were “extraordinary and exceptional circumstances” that led to this monetary mess. It’s more the changing of the times. We’ll point out the obvious that email is free. You can pay bills online. People just don’t mail as many letters anymore. UPS and FedEx dominate the package-delivering market — and both turn a profit, we might add. The Postal Service delivers many advertising fliers these days. Some of its biggest customers are marketing businesses. That’s an expensive ad delivery service.

So what’s the solution?

Newspapers have had to adjust to survive in this world of instant news. The Postal Service must do the same. It must continue to make adjustments. Eliminating Saturday delivery will help cut costs. Closing more post offices will have to happen. Hours can be reduced. Sadly, the workforce, which is smaller than years past, will have to be reduced further.

Some residents of Hanamaulu, we should note, have expressed hopes that the Hanamaulu Post Office will be rebuilt, though that seems doubtful since it was destroyed in a fire last year.

Let’s face it. We like our post offices. We like our carriers, too. We all have our share of good feelings toward the Postal Service and what it represents. It’s part of our past, our present and we want it to be part of our future. The Postal Service is important. It’s a key player in our economy. There is a place for the Postal Service. But not in its current model. It can’t continue to lose billions every year.

Lawmakers should approve this rate hike. But they must also realize it’s like plugging one hole in the dike only to see more spring up. Long-term solutions must be found. While they will be painful decisions, Congress, or the Postal Service, must make them soon.


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