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September 2, 2023

USPS is the acronym for one of the worst run operations of a poorly run US government bureaucracy. In July, the US Postal Service announced its second increase in First Class Postage rates this year. The explanation is that inflation and prior bad decisions have set it up to lose a billion dollars this year. The representatives of the USPS also note that there is less first-class mail, so that means they are not getting as much money from what might be considered their historic flagship service.

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History

Most Americans know the Second Continental Congress founded the Post Office in the 1775 as part of the break from British control, and that Ben Franklin was the first postmaster general. The ability to get mail throughout the colonies was an indication of civilization for the new nation in formation. That the Post Office was a success is beyond debate. It reliably functioned for many years and contributed to America’s development.

In 1970, President Richard Nixon signed into law the Postal Reorganization Act, which created the USPS, effective July 1971. That reorganization has been the status of the Postal Service so long, many Americans may assume that is how it was always structured. At the time, creating the USPS was considered a bipartisan effort to salvage the inefficient Postal Service and modernize it.

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The concept was that the USPS would be its own corporation and would make business decisions internally, not through congressional committees. The critical improvement was that politics would be removed from the decision-making process. The same legislation created the Postal Rate Commission (“PRC”) to provide input from the public and competing delivery services.

In the early 1980s, during the Reagan Administration, the government phased out the federal subsidy to the USPS for providing free or discounted services to non-profits and services for the blind. Again, the idea was to have a government corporation that covered its expenses and made good business decisions. In the rules for operations, however, there was a particular provision that each class of mail had to pay for itself. The oversight for this was through the PRC. Given that the same mail delivery person brings most classes of mail to each address, it is not clear how one would really separate the fully allocated cost of one type of mail from another.

In 2006, with the Postal Accountability and Enhancement Act, more reforms came along, including changing the PRC’s official name to the Postal Regulatory Commission. The new PRC was to keep a better eye on the USPS and ensure compliance with various laws and regulations.

Image: A derelict USPS mailbox by Jason Taellious. CC BY-SA 2.0.

Today

To say that these past efforts to right the sinking ship have been a failure would be a massive understatement. The USPS has been an ocean of red ink. A 2021 Forbes article headline pretty much sums up the status quo: “Why The U.S. Post Office Is In Trouble – 678,539 Employees And A $9.2 Billion Loss In 2020.”

There is a saying that “insanity is doing the same thing over and over again and expecting a different result.” Maybe it is time for real changes at the good old post office. Because Americans are sending dramatically less first-class mail, the USPS is taking in less money. In the private sector, that means time to cut staff, cut services, or increase the cost of the services that make up the volume of services the public is requesting. Increasing the cost of a first-class stamp is sort of like the saying about “rearranging chairs on the deck of the Titanic.”