March 10, 2004,
Last month's discovery of ricin at a Senate office building has put the specter of postal terrorism back in the headlines. The U.S. Postal Service has analyzed the danger and come up with a $779 million price tag which it says it needs to pay for beefed-up security measures.
In fact, the Postal Service is now threatening to raise stamp prices if the federal government doesn't fork over the cash immediately. Few would deny that increased security is critical for today's mail delivery. But neither taxpayers nor postal consumers should have to foot the bill.
The Postal Service could easily pay for new security and emergency systems without burdening taxpayers or hiking postal rates. That's because the additional money is already available.
The USPS simply needs to streamline or cut entirely some inefficient and extraneous operations. The Postal Service could dig $779 million out of its $68-billion budget the way you or I might find 50 cents under a sofa cushion.
First of all, the Postal Service is engaged in all sorts of costly non-core activities that detract from its ability to protect Americans. Does the USPS, for instance, need to spend so heavily on television and print advertisements improving its image as a speed eagle when it already has a federally enforced monopoly on first and third-class mail?
Why, for that matter, is the USPS in the dime-store business of selling T-shirts, teddy bears, coffee mugs, and framed artwork? What will postal offices be selling next cheeseburgers?
Even more wastefully, the Postal Service has spent well over $50 million on professional sports teams in recent years. USPS generosity extends well beyond its high-profile sponsorship of cycling hero Lance Armstrong. Most people would be shocked to learn that the Postal Service has spent millions on the New York Yankees, the New York Giants, and the Tampa Bay Devil Rays.
These activities have absolutely nothing to do with delivering the mail. In the face of serious terrorist threats affecting its own operations, the least the USPS should do is stop throwing large sums of money at deep-pocketed sports teams and random, ill-advised business ventures.
More significantly, by closing the 10,000 smallest post offices, the USPS could save over $500 million per year, according to Robert Cohen, director of planning for the Postal Rate Commission. In fact, many of these facilities average fewer than ten transactions daily. These offices are the epitome of organizational inefficiency.
The USPS has also sunk billions of dollars into advanced computerized equipment to reduce the cost of processing mail. But chronic overstaffing prevents automation gains from ever increasing overall productivity.
Not only is the Postal Service overstaffed, but workers are also paid a generous premium. According to the Presidential Postal Commission, new hires receive a 28.4 percent pay increase, on average, when they join the USPS. The result is that postal labor costs hang at 80 percent of total costs in contrast to about 50 percent at private delivery companies. Quite simply, the Postal Service needs to downsize.
In his recently unveiled 2005 budget which doesn't provide for USPS emergency funding President Bush recognizes that more money isn't what the Postal Service needs. Rather, the critical new security requirement presents another urgent reason for the Postal Service to reprioritize.
By returning to its core mission of delivering first class mail efficiently, the USPS could simultaneously streamline its own operations and protect the American public from ricin without driving the country deeper into debt.
Sam Ryan is a senior fellow at the Lexington Institute in Arlington, Va.