Postal Reform - Laying the Cards on the Table

Woman-plays-her-hand-of-cards

As the November elections loom, time is quickly running out on the 113th Congress. There is much to be done, including passing meaningful postal reform and extending the life of the Transportation Trust Fund which funds highway safety and efficiency projects across the country.

Discussions remain heated on both sides of the aisle with the overall intent to balance the budget without a tax increase. But some of the proposals that have been presented in the House and Senate make you wonder just how achievable this goal will be if Congress is going to use honest budgeting practices.

Congress needs to raise between $7 billion and $15 billion to extend the transportation fund for the next 6 to 12 months. This should be a straightforward budget exercise. However, in an election year nothing is ever straightforward and no one wants to propose increasing the gas tax, which currently funds our transportation infrastructure. Therefore, Congress needs to recognize savings or grow revenue in another part of the budget and use those savings for the transportation fund.

The House of Representative’s solution to extend the transportation fund is to cut mail delivery service to five days per week, saving the U.S. Postal Service (USPS) about $2 billion annually. Over the next five years, Congress is banking on this $10 billion in savings, which it proposes be recognized now and transferred to the transportation budget. There are numerous problems with this proposed solution – most notably that the USPS is already $20 billion in debt and, therefore, there isn’t really cash to be redirected. Not to mention that if there are going to be savings proposed for the USPS, it is imperative that it be allowed to realize those savings to ensure they are sustainable long-term.

Only in Congress is potential future savings used to “balance” the budget today. House leaders justify this creative accounting under the assumption that a USPS bail out by the taxpayers is inevitable – which is by no means certain. Their reasoning is that by cutting back on delivery days the future bail out will be $10 billion less and that savings can be used now for the transportation fund.

Of course this logic is convoluted and hard to follow but it should be simple. How in the world is an entity with $20 billion in debt supposed to bail out another entity that is $15 billion in the red? No matter how you slice it, it’s simply not possible. In the end, the general fund, which itself is facing trillions of dollars of debt, will borrow the $15 billion for the transportation fund, spiraling the country even further into debt.

The Senate doesn’t have plans to use the USPS to fund road improvements but its current solution for addressing the USPS’ financial struggles is to, once again, raise postage rates. Thankfully, the Senate isn’t able to pass the bill because enough Senators, lead by Wisconsin Senator Tammy Baldwin, agree with us that that a price increase will only drive out more volume and exacerbate the USPS’ problems.

If we don’t get reform passed by August, the House and Senate will change after the November elections and we will have to start over, and that won’t help anyone! Real postal reforms can be enacted even if the bill doesn’t solve every problem. It is time for Congress to step up and pass the meaningful reforms that we here at Quad/Graphics and the rest of the mailing industry have been advocating. These reforms will ensure the long-term sustainability of the USPS. In so doing, Congress will be protecting an industry that employs more than 8 million people and accounts for $1.2 trillion of economic activity. Seems like a no-brainer!

 

Patrick Henderson is Quad/Graphics Director of Government Affairs. His work focuses on the public policy goals of the company regarding the USPS, environmental compliance and tax policy. Pat formerly served as the Legislative Director for Wisconsin Governor Jim Doyle as well as Deputy Secretary for the Wisconsin Department of Natural Resources and as policy director for two Wisconsin state senators. 


Popular Tags :

Related Posts

Can postal reform happen in 2014?
Rate hike will harm postal service - Rafe Morrissey, The Hill
How the USPS Can Save $75 Billion Without Cutting Services