Since when does creating an unregulated monopoly with total pricing power qualify as reform?
That’s the “money question” as a proposed bill, scheduled to be up for a vote on Wednesday, seeks to bail out the United States Postal Service from its systemic woes with another round of band-aids, rather than real reform.
If a company were failing, unable or unwilling to stop overspending and its future was in danger, what board of directors in its right mind would pump more money into its existing leadership and structure and give them a blank check to do what they want?
But that’s just what this bill will do. If this new law sees the light of day, expect many more monopolistic overreaches like the 6 percent stamp rate hike (three times the rate of inflation) that the USPS put into effect last Sunday. And remember, the Post Office has a monopoly on your mailbox, too.
But the monopoly over the mailbox is no longer enough for the USPS. Now, the Postal Service is asking Congress to give it total, unchecked, unprecedented power to charge you and all other Americans whatever it wants for its “services.” And Congress is likely to go along.
Although the financial performance of the USPS has been improving lately, the Postal Service unquestionably faces serious challenges. Mail volume has been declining for years because of digital diversion — the increased use of the Internet and email to communicate, pay bills and conduct business transactions of all kinds. As a result, mail simply isn’t as necessary as it once was.
Unfortunately, the USPS hasn’t downsized as fast as the demand for its services has fallen. The result is overcapacity — its network is sized to handle twice today’s mail volume.
The USPS has not become irrelevant, however. For many American households, and for many key industries employing millions of Americans, a viable and affordable mail service remains crucial. A shrinking Postal Service is a real problem for the country and relief through thoughtful, constructive legislation is needed. But simply handing the USPS a blank check and telling it, in effect, to solve all its problems by raising prices on customers is not the solution — indeed, it is exactly the opposite of what a private business would do. Yet that is exactly what the Senate committee is poised to do.
The bill before the Senate Homeland Security and Governmental Affairs Committee, scheduled to be voted on Wednesday, would make the USPS a government-sanctioned, unfettered, unchecked monopoly with unreviewable power to raise postage rates — whenever and however it chooses. The legislation authorizes the Postal Service Board of Governors to eliminate the main control on postal prices today — a federal law tying price increases to the rate of inflation — and arbitrarily set prices as high as the Postal Service pleases, with no oversight.
The bill would also neuter the current regulator of the USPS, the independent U.S. Postal Regulatory Commission, and stop the U.S. Court of Appeals from reviewing a pending case stemming from a USPS attempt last year to raise postage rates above the rate of inflation. The postmaster general and the rest of the USPS Board of Governors would gain emperor-like authority to raise postage rates at the expense of customers. No one — certainly not a government-owned service as big and important as the USPS — should have that much unchecked power.
No public, quasi-public, or private entity — especially one with monopoly power over large segments of the American economy — should be so insulated from regulatory scrutiny or judicial review. Indeed, other vital network industries such as railroads, telephone companies, and gas and electric utilities have their rates regulated by independent regulatory commissions in markets where the firms still have monopoly power. And these regulated firms aren’t sheltered from competition by federal criminal law. By enacting the Senate bill currently under consideration, Congress would be abdicating its own responsibilities and gutting vital checks on the USPS’s exercise of its monopoly power.
Even in the digital age, everyone agrees that the nation needs – and will need — a viable and affordable postal system. Thoughtful, carefully balanced postal reform legislation undoubtedly is needed: legislation that will promote efficiency, innovation and cost effectiveness. Simply handing the postmaster general and his board a blank check to raise prices is not the answer.
On Wednesday, the Senate Homeland Security and Governmental Affairs Committee should stamp the USPS power grab “Return to Sender.”
Mary Berner is the president and CEO of MPA — the Association of Magazine Media, whose more than 260 members publish nearly 1,000 magazine titles.