Postal 4 pie house free#

Republicans aren't likely to go for that plan, but fixing the Post Office's problems don't seem to be high on their list of priorities either.

As Reason's Peter Suderman wrote yesterday, this is 'not a new idea, but it is a bad one.' In other words, it would take a government agency that's already failing to compete with private sector alternatives in the shipping industry (despite massive structural advantages) and let it fail in competition against private banks as well-and would force poorer Americans to rely on that floundering institution as their primary provider of banking services. Alexandria Ocasio-Cortez (D–N.Y.) would effectively convert the Post Office into a bank of sorts, offering checking and savings accounts. An overhaul of banking and credit card systems floated this week by Sen. Unfortunately, some members of Congress seem more interested in having the Postal Service expand its losing business into new areas. 'Privatization would give the the flexibility to save itself, allowing access to debt and equity markets for capital investment-a lifeline for a company that has long been short of cash and deferring the purchase of vital new vehicles and technologies,' Chris Edwards, an economist at the Cato Institute, writes in National Review. Still, it could net a windfall to help pay off the service's massive liabilities-the Cornell economist Richard Geddes has found that a postal IPO could raise $40 billion.

Postal 4 pie house free#

That means it will only become more difficult to free the Post Office from government control as the agency's debt mount. It would probably require significant restructuring and service changes for the privatized service to net a profit, and the federal government would likely need to absorb the current debts. And they pay taxes, which the Postal Service does not.Īs Reason has been arguing for literally 50 years, the postal service should be privatized. The Post Office has lost $69 billion since 2007, and it probably would have gone bankrupt long ago if it were a private entity-FedEx and UPS certainly wouldn't exist today if they were posting annual losses of $4 billion. The agency has $100 billion in unfunded pension liabilities and ' no clear path to profitability,' according to a White House assessment report released last year. It's not exactly news that personnel costs are driving the Postal Service's financial problems. The agency predicted that those changes would increase revenue by $1.7 billion-but expenses have been outpacing revenues by a wide margin. The cost of a stamp jumped 10 percent* on January 1, and other mailing services increased by 2.5 percent on average.

That comes even after an increase in the cost of sending first-class mail. At the time, Postmaster General Megan Brennan bluntly declared that the agency 'cannot generate revenue or cut enough costs to pay our bills' and predicted that the agency would continue to post losses at 'an accelerating rate.'Īfter losing $1.5 billion in the first quarter of the current fiscal year, the Post Office has now lost $3.6 billion in just six months. Its big losses are driven by a sharp increase in expenses, primarily workers' compensation costs, pension liabilities, and payments for retirees' health benefits.įor the fiscal year that ended on September 30, 2018, the Postal Service recorded a then-record loss of $3.9 billion. In its quarterly fiscal report, published today, the Post Office reported small decreases in mail volume and overall revenue compared to the same quarter of 2018. Postal Service lost more than $2 billion during the second quarter of the fiscal year, putting it on track to finish the current year more than $7 billion in the red-way worse than the nearly $4 billion in losses it posted last year.