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Be wary of talk about privatizing the post office

A recent default by the U.S. Postal Service has revived talk about privatizing the post office, but the U.S. mail hasn't come close to outliving its usefulness.

August 07, 2012|Michael Hiltzik
  • U.S. Postal Service mail carrier Deandra Carter makes her deliveries in Avondale Estates, Ga.
U.S. Postal Service mail carrier Deandra Carter makes her deliveries in… (Erik S. Lesser, EPA )

While thumbing through the household mail one recent day — a bill from the vet, a statement from the bank, 47 come-ons for low-interest credit cards and a birthday card from Grandma — I pondered the following riddle:

Why is it that the same conservatives who harped on how an obscure provision of the U.S. Constitution should have invalidated the healthcare reform act never talk about the provision that gives the federal government responsibility for postal service?

It's right there, at Article I, Section 8. Yet, in some quarters, talk of privatizing the post office never seems to ebb. That talk is experiencing another surge just now, because theU.S. Postal Service is in the process of defaulting on a payment of more than $5 billion owed to the Treasury.

The default has conservatives and libertarians chattering again about how the Postal Service long ago outlived its usefulness. Almost nobody uses the mail anymore down our way (goes the argument), and universal flat-rate service, the governing principle of theU.S. mailfor some two centuries, is a relic of the past and should be put to sleep. The post office, it's said, should be privatized.

A couple of things should be kept in mind as this debate unfolds. One is that as a fiscal crisis, this is as artificial as they come. It's largely the result of a 2006 law that required the Postal Service — almost alone among public and private enterprises — to pre-fund its entire future liability for retiree healthcare expenses. The payments totaled $38 billion through 2011, with further installments of between $5.6 billion and $11.1 billion a year due through 2016.

Combined with the impact of the slowdown in mail volume, the shift toward email and online bill-paying, this put the system in big trouble. Without the unnecessary healthcare payments, however, its deficit is manageable. In 2011, the Postal Service collected $65.7 billion and ended up about $5.1 billion in the red. How big a deal is that? Last year the postal service's deficit came to just over one-tenth of 1% of the federal budget.

The other important point is that the U.S. mail hasn't come close to outliving its usefulness. The day may come when all mail can be delivered electronically, but as long as we're still getting 168 billion pieces of mail a year, we're not there yet. Not even close.

Conservatives who like nothing more than to boil down the national debt to a scary per-capita number act as if they think that postal volume is negligible. OK, let's play it their way: 168 billion pieces of mail works out to 540 pieces per year for every man, woman or child in the United States. Life without paper mail today exists, if anywhere, only in the world ofPhilip K. Dickstories. (And who wants to live in that world?)

What could explain conservative hostility toward the U.S. Postal Service? After all, most members of Congress, Republican or Democrat, will defend to the death the smallest one-room post office in their district.

But what about the characteristics of the workforce? It's heavily and effectively unionized, for one thing. For another, over a long period the post office has been a reliable steppingstone to the middle class for African American families. (Black workers make up about 11% of the USPS payroll, about twice their representation in the overall workforce.) Maybe some people just think these workers are expendable.

The pro-privatization argument rests on the assumption that private enterprise is capable of providing adequate service anywhere in the U.S. at competitive prices. The argument usually doesn't incorporate standardized flat rates, though — the idea being that any dope who "chooses" to live in a remote spot should pay the cost of getting his mail there.

This argument has many obvious flaws, but the most glaring are that not everyone has it within their power to "choose" where they live; and not everyone can live within walking distance of the Dupont Circle stop on the Washington, D.C., subway, from where a lot of these nonchalantly Darwinian pronouncements seem to emanate.

The most insidious claim heard in this debate is that mail service ought to be cost-effective. First of all, there's no such thing. Delivery to some communities is never going to be cost-effective. As economics blogger Kevin Drum points out, in some places delivery always will be unprofitable, except at prices that would make service effectively unusable.

The idea that government services such as mail delivery should be cost-effective is a conservative fetish, with no grounding in the Constitution, history or practice. If every government program were held to this standard, we would have no interstate highways. No international airports. No Internet. No levees on the Mississippi and no Hoover Dam.

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