Richard Geddes, Cornell University professor of policy analysis and management and an expert on U.S. Postal Service policy, comments on today’s failure by the U.S. Postal Service to pay a more than $5 billion payment due to the Treasury Department.
He says:
“The Postal Service defaulted on a $5.6 billion payment due to the Treasury today to pre-fund its retiree's health care costs, and Congress did not react. But the Service's fiscal woes are a sign of a much deeper problem: its business model does not match the new electronic communications marketplace.
“First class mail — the Service's most profitable activity — is down well over 20 percent since its peak, as is overall mail volume. The Postal Service must be given additional freedom to make fundamental management decisions regarding the extent of its network and frequency of service. In short, Congress should give it the freedom it needs to keep its costs in line with market realities. If it doesn't, the Postal Service's fiscal woes will only worsen over time.”
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