The decision of the Independent Postal Regulatory Commission to approve a "temporary" price hike of 3 cents to 49 cents for a first-class stamp to help the Postal Service recover financially from dramatic mail decreases over the past five years will more than likely contribute to more dramatic mail decreases. The larger issue is the future of the Postal Service, buffeted as it is by private competitors and the increasing shift to electronic communications and bill-paying.
The higher rate, which is supposed to last no more than two years, will take effect on January 26. The Commission rejected a proposal to make the increase permanent by a 2-to-1 vote, but inflation will probably accomplish that in essence anyway. In this day and age, no consumers expect price increases to be reversed.
In one of those ironies regularly produced by the federal government, Postmaster General Patrick Donahue proposed ending Saturday mail delivery in April to cut costs but couldn’t get the necessary approval from Congress, which is usually all about cutting costs. Congress, however, won’t lift a finger to help the Postal Service get out of debt. Senator Tom Carper, the Delaware Democrat who chairs the Homeland Security and Governmental Affairs Committee, has proposed a compromise in which Saturday delivery will end if mail volume or revenue drops below specified levels that has earned traction in Congress and with the postal hierarchy, which remains desperate to end Saturday delivery. Unions representing postal workers, however, are opposed because of the likely job losses.
No one wants jobs to be cut anywhere in this economy, but the public sector cannot be immune from cuts that have long been the norm in the private sector. The Postal Service is also buckling under pension obligations to employees at a time when pensions are rapidly disappearing from every sector of the economy with the exception of government. While the Postal Service did narrow its losses in the last fiscal year, it narrowed them to $5 billion, which is hardly a sign of fiscal health.
The end of Saturday mail delivery is inevitable, and the Carper plan is a smart way to justify and ease the transition. That will not, however, be the last tough act the Postal Service and a reluctant Congress will need to make.