The financial welfare of the United States Postal Service (USPS) has been of particular concern for the Taxpayers Protection Alliance (TPA) and other concerned taxpayer advocates. Financial instability, continued loss of focus on delivering the mail, and a lack of leadership and accountability are all plaguing the agency. Unfortunately, there appears to be no recognition of the problems. Last week, USPS issued an improper statement on the upcoming expiration of the exigent surcharge for mailing products and services. The USPS is now inappropriately calling on Congress or the courts to extend the inflated postal rate, which is set to expire on April 10. The exigent surcharge was an emergency 4.3% rate increase on Standard Mail approved by the Postal Regulatory Commission 9PRC) in December of 2013 in response to loss of revenue during the most recent recession from December 2007 to June 2009.
From what the USPS’s filing shows, many of these products (primarily related to letter mail) are already pulling in more revenue to cover their costs at a nearly 2 to 1 rate. Yet, arguments to extend, or possibly even make these inflated rates permanent, continue to be made.
The reality is that financial troubles at the USPS are driven by products such as delivery of packages, specialty services for groceries and fish, other ill-advised ventures, and spending billions on new vehicles when there are alternatives that will save billions . The exigent rate they are seeking from Congress amounts to a handout from the American people to subsidize their poor business choices. After losing another $5 billion in 2015, the agency cannot justify such a request and neither Congress nor the courts should grant the extension.
As the PRC notes, the current exigent rate hike has been in effect for over a year and is a measure that is reserved for “extraordinary or exceptional circumstances.” The most recent justification (as noted earlier) for the surcharge argued by the Postal Service was to help alleviate effects of the recession that ended in 2009.
While the economy is still showing signs of a sluggish recovery, the courts determined last year that the recession of six years ago is no excuse for implementing this emergency mechanism. The U.S. Court of Appeals ruled that our current circumstances are simply “the new normal” and that USPS must now adjust accordingly to any potential aftereffects that they claim to be facing. The agency should be focusing on adjusting their role and restoring it to the original mission they were created to carry out: delivering mail. Several years of billions of dollars in losses and still the USPS continues to look for new ways to spend money they don’t have. The agency defies all logic and common sense when they prioritize new places to try their grocery delivery services instead of working with Congress, the PRC, and management to find a solution to the fiscal problems that are harming the performance and quality of their services.
The essential letter delivery service from USPS has already been damaged enough by lagging performance, as sending mail now takes longer and longer to arrive. It would only be more problematic to continue to raise these rates unnecessarily.
TPA has argued that USPS must provide better leadership and greater cost accountability instead of seeking handouts from Congress. This starts on the inside and it begins with the USPS working through its regulatory body on prioritizing products and a business model that will put it on a path to sustainability.
