Today, Citizens Against Government Waste (CAGW) denounced a proposal made by the United States Postal Service (USPS) to increase the cost of a first-class stamp from 46 cents to 49 cents starting on January 26, 2014. Under the plan, first-class mail postage for postcards and packages would also increase 3 cents, or 6.5 percent. CAGW has long opposed consumer price increases, preferring for Congress to let the USPS operate more like a private-sector business in order to control its operations, cut costs, and reduce the risk of a taxpayer bailout.
According to a September 25, 2013 article by USA Today, the price hike would increase additional USPS revenue by $2 billion a year. The proposed price hike comes at a time when the USPS governing board claims the increase is needed due to the agency’s precarious financial condition, which includes a congressional mandate to fund billions of dollars in future retirement benefits for employees. The proposed increase signals lingering financial challenges for the USPS, which posted a $15.9 billion net loss in 2012 and expects annual losses to burgeon to $18.2 billion by 2015, accumulating $92 billion in debt by 2016.
In a recent WasteWatcher report, CAGW highlighted the USPS’ efforts to strengthen the agency by leveraging opportunities to implement better business practices. Unfortunately, all efforts at structural reform made by the USPS have been blocked by Congress, thus increasing the risk of failure and a taxpayer bailout. Although a world leader in “work-sharing,” the USPS does virtually nothing, including logistics, transportation, and mail services, that could not be done, and done more efficiently, by private-sector companies.
When postal management has attempted to move forward with overdue modernization initiatives, such as five-day delivery, it is saddled with an intransigent labor force that resists modernization. At the same time, Congress is fixated on short-term, “feel-good” measures that pose as postal reforms, instead of focusing on the long-term financial health of the USPS.
“USPS teeters on the brink of financial ruin. As with the rest of the nation’s fiscal problems, Congress is ignoring the big picture,” said CAGW President Tom Schatz. “Accordingly, Congress should resist parochial pressures and allow the USPS to react as any business would to the problem of falling demand for its services: by cutting costs, not increasing prices.”
CAGW is a nonpartisan, nonprofit organization dedicated to eliminating waste, fraud, abuse, and mismanagement in government.
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Alex Booze, 202-467-5318
Leslie Paige, 202-467-5300