Why does the USPS need to be profitable?

[Crafter_Man]

Most other services provided by the U.S. federal government are "free." Why do we make an exception for the U.S. Postal Service? Since it's a duty listed in the constitution, why isn't mail delivery completely subsidized?

[DCnDC]

It's designed to break even (though it does actually net a profit). See here.

[Ferret Herder]

I shudder to think of the sheer volume of paper "spam" you'd get if mail was free.

[fumster]

Apparently it is just too expensive to mail an "excluded middle".

[CookingWithGas]

Originally Posted by Ferret Herder

I shudder to think of the sheer volume of paper "spam" you'd get if mail was free.

I don't think the proposition is so much that you should be able to mail a letter for free as much as that the USPS should not have to be economically self-supporting. The State Department charges for passports but also is funded by taxpayers' money. Why can't USPS work the same way? USPS is under a burden of having to serve virtually every address in the country at the same flat rate for first class mail. Of greater concern is the mandate for how to fund employee retirement (I believe USPS actually shows an operating profit).

Taxpayer subsidy of USPS ended in 1982. Although I was a young adult at the time I don't remember the rationale for the change and I can't find it online, only various timelines of USPS history.

[aceplace57]

I've wondered about this too. Postage simply offsets some of the cost for processing mail. Mail service is something the government is expected to provide.

I've never understood why anyone expects the mail to be self supporting.

[Nametag]

The Postal Reorganization Act of 1970 requires it, that's why. It was actually a response to the Postal Strike of 1970, and it allowed the postal service to operate independently, within the limits set by Congress and by the appointed board of governors. This allowed the postal workers to bargain collectively, directly with the postal service, instead of having wage increases and working conditions directly passed by Congress.

[Rigamarole]

Because this is America, damnit! Everything needs to be profitable. Pretty soon they're gonna find a way to charge us for all this free air we've been breathing. Damn socialists and their free-air policies are hurting the job creators!

[Crafter_Man]

Originally Posted by aceplace57

Mail service is something the government is expected to provide.

Agree. I mean, it's in the damn federal constitution.

As far as I know, no other federal agency is expected to be self-supporting. Even agencies not mentioned in the constitution are not expected to be self-supporting.

[jtgain]

It may have nothing to do with the rationale behind it, but the Post Office does need to respond to market forces to change. We don't need to hand write a letter to our brother in California and put a stamp on it anymore. We have email.

I foresee that in my lifetime, we won't receive anything in the mail except for tangible goods that are delivered. Fed Ex and UPS already do this. All of the other stuff can be electronically processed. As such, the Post Office needs to have a monetary incentive to respond to market demands instead of being a bunch of fat cat bureaucrats resisting this change.

If we said, "It's a constitutional function, so the taxpayers will subsidize it" we would never have any reform in the postal system, at a time when it is actually undergoing major reform from new technology.

[grude]

Originally Posted by jtgain

It may have nothing to do with the rationale behind it, but the Post Office does need to respond to market forces to change. We don't need to hand write a letter to our brother in California and put a stamp on it anymore. We have email.

I foresee that in my lifetime, we won't receive anything in the mail except for tangible goods that are delivered. Fed Ex and UPS already do this. All of the other stuff can be electronically processed. As such, the Post Office needs to have a monetary incentive to respond to market demands instead of being a bunch of fat cat bureaucrats resisting this change.

If we said, "It's a constitutional function, so the taxpayers will subsidize it" we would never have any reform in the postal system, at a time when it is actually undergoing major reform from new technology.

Even now stuff like legal documents and government forms which could be printed out aren't for whatever reason.

I doubt that personal correspondence ever made up the bulk of USPS mail.

[jtgain]

Originally Posted by grude

Even now stuff like legal documents and government forms which could be printed out aren't for whatever reason.

I doubt that personal correspondence ever made up the bulk of USPS mail.

That was my larger point. To the extent that legal documents, government forms, and certified notifications still need to be printed and mailed, that will cease in the next 10 to 20 years when the laws catch up with new technology.

[BrotherCadfael]

Originally Posted by Crafter_Man

Since it's a duty listed in the constitution, why isn't mail delivery completely subsidized?

Originally Posted by Crafter_Man

Agree. I mean, it's in the damn federal constitution.

Originally Posted by jtgain

If we said, "It's a constitutional function, so the taxpayers will subsidize it" we would never have any reform in the postal system, at a time when it is actually undergoing major reform from new technology.

All wrong.

The Constitution says (Article I, Section 8, Clause 7) that the federal government MAY operate a postal service if it chooses to. It is not mandatory that the government actually do so.

[Alley Dweller]

Originally Posted by Crafter_Man

As far as I know, no other federal agency is expected to be self-supporting. Even agencies not mentioned in the constitution are not expected to be self-supporting.

A small sampling of self-supporting federal agencies:

NTIS - National Technical Information Service
USPTO - United States Patent and Trademark Office
Federal Deposit Insurance Corporation (FDIC)
Pension Benefit Guaranty Corporation (PBGC)
Metropolitan Washington Airports Authority (MWAA)
United States Enrichment Corporation (USEC)

[JohnT]

The current issue is that Congress mandated that the USPS fully fund its pension plan (something that every company and entity should strive towards), but...

1. The USPS is getting hit by sharply declining usage from mainstays like print advertisers, people writing letters, and now, monthly bills and statements.

2. The USPS must petition Congress to raise rates, and as voter-friendly a measure making sure pensions are fully funded is, a measure raising postal rates is more unfriendly to those same voters. Therefore, the USPS spends months, years arguing it out with Congress, with the rates being approved to no ones satisfaction. And, with the time spent negotiating, by the time rates are raised market conditions have changed and the new rates are, again, out of phase with the market.

To save the post office Congress needs to repeal the act, make the USPS part of the Federal bureaucracy again... and if that happens, we'll wait and see how long it will be until they vote themselves the right to defer pension payments. My guess would be less than 1 year.

If Congress wants to keep it an on-going entity, it will need to "AIG" or "GM" the company, with the intention of spinning off the USPS within a certain time frame.

[Crafter_Man]

Originally Posted by Alley Dweller

A small sampling of self-supporting federal agencies:

NTIS - National Technical Information Service
USPTO - United States Patent and Trademark Office
Federal Deposit Insurance Corporation (FDIC)
Pension Benefit Guaranty Corporation (PBGC)
Metropolitan Washington Airports Authority (MWAA)
United States Enrichment Corporation (USEC)

I stand corrected.

I love this forum.

[Gagundathar]

Yes. I was unaware of the postal strike of 1970 and its effects.
This place rocks!

[steviep24]

Originally Posted by Alley Dweller

A small sampling of self-supporting federal agencies:

NTIS - National Technical Information Service
USPTO - United States Patent and Trademark Office
Federal Deposit Insurance Corporation (FDIC)
Pension Benefit Guaranty Corporation (PBGC)
Metropolitan Washington Airports Authority (MWAA)
United States Enrichment Corporation (USEC)

OSHA (Occupational Safety and Health Administration) is also self supporting. Revenue comes from rather steep fines resulting from serious safety violations.

[md2000]

Originally Posted by Crafter_Man

Most other services provided by the U.S. federal government are "free." Why do we make an exception for the U.S. Postal Service? Since it's a duty listed in the constitution, why isn't mail delivery completely subsidized?

It doesn't have to be break-even.

It just has to be somewhere between "so cheap everyone sends crap and spam that should go another way*" and "so expensive nobody uses it". Prefereably at the point of "just right" cost-wise. SO far, so good.

*Read once of someone who found it was cheaper to mail building materials to a site in remote northern Alaska than to ship them commercially, since the parcel rates were the same everywhere and commercial fly-in rates were highway robbery.

[Iggy]

Originally Posted by md2000

...
*Read once of someone who found it was cheaper to mail building materials to a site in remote northern Alaska than to ship them commercially, since the parcel rates were the same everywhere and commercial fly-in rates were highway robbery.

I was about to take a job in Palau (zip code 96940) and was checking out the cost of moving. Palau was a former US administered Trust Territory and as such has US postal service at domestic rates.

It was going to be cheaper by far to mail extra suitcases than pay the airline the extra bag fees. The mail, of course, goes on the same plane.

Instead I moved to Cayman. Much closer and MANY times more expensive to mail stuff to since it is priced as international.

Just ran the comparison again for fun. $365 to Cayman. $108 to Palau. For a 65lb package.

[IAmNotSpartacus]

We can add the FCC to the list. They make a decent sized deposit to the Treasury each year. Though that mostly comes from the auction of wireless spectrum

[Hail Ants]

Originally Posted by Gagundathar

Yes. I was unaware of the postal strike of 1970 and its effects.
This place rocks!

The 70s legislation also changed the name to the United States Postal Service (USPS). Before that in was the United States Post Office (USPO).

[t-bonham@scc.net]

Originally Posted by JohnT

The current issue is that Congress mandated that the USPS fully fund its pension plan (something that every company and entity should strive towards), but...

1. The USPS is getting hit by sharply declining usage from mainstays like print advertisers, people writing letters, and now, monthly bills and statements.

2. The USPS must petition Congress to raise rates, and as voter-friendly a measure making sure pensions are fully funded is, a measure raising postal rates is more unfriendly to those same voters. Therefore, the USPS spends months, years arguing it out with Congress, with the rates being approved to no ones satisfaction. And, with the time spent negotiating, by the time rates are raised market conditions have changed and the new rates are, again, out of phase with the market.

Also:
3. Anytime the Post Office proposes closing down a barely-used PO in some tiny village, they are hit with a barrage of complaints from the residents .. and their Congressperson, and Senator. Other businesses can open & close offices at will, based on demand. Not the USPO.

[Tom Tildrum]

Originally Posted by Alley Dweller

United States Enrichment Corporation (USEC)

Well, of course we'd expect them to be self-supporting.

[Elendil's Heir]

I think it was Dennis Miller who said, "I have no complaints about the Postal Service. Ever try walking up to someone in Times Square and saying, 'I'll give you 45 cents to take this envelope to San Francisco for me'?"

[Blakeyrat]

Originally Posted by Alley Dweller

A small sampling of self-supporting federal agencies:

USPTO - United States Patent and Trademark Office

If only the USPTO could strive to meet the speed and reliability of the USPS...