Yesterday, the Tax Foundation reported that the United States Postal Service (USPS) lost $51.7 billion between 2007 and 2014. The last time the agency earned a profit was in 2006, nearly a decade ago. It is likely that the pattern of losing several billion dollars will continue into this year. In the first two quarters of 2015, the agency had a net loss of $2.8 billion. In addition, the USPS has not made all of its obligatory payments this year. This deficit is on top of the 62 percent increase in unfunded liabilities that the USPS has incurred from 2007 to 2013. There is no end in sight to USPS’s annual losses, leaving some to wonder if a bailout is in the agency’s future.
Curtis Kalin of Citizens Against Government Waste emphasizes the agency’s need for reform. A failing business restructures itself when it incurs losses. He argues that the USPS should do the same. Although a restructuring of the agency seems like an obvious solution, it is unlikely. USPS is a government agency and is frequently micromanaged by Congress, so it does not have the ability to change or restructure itself like a business in the private sector. Inefficiencies go unchanged simply because the institution makes them incredibly hard or nearly impossible to change.
Its inability or unwillingness to restructure and correct its inefficiency means a bailout is a likely reality in the agency’s future. A bailout may be the only way the USPS can survive without drastic ramifications. A final way to save the agency’s life- at the expense of taxpayers.
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Categories:
US Economic News, US Government Waste
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