NCPA - National Center for Policy Analysis

Postal Service Efficiency and Safety

November 29, 2001

The post office is asking for a $5.5 billion bailout from Congress due to reduced mail volume since Sept. 11 and the expense of increased security measures.

But critics say the financial problems of the United States Postal Service predate Sept. 11, and that security could be improved at less cost than the service claims.

  • Last year, Congress contributed only $93 million to the USPS's $64 billion budget.
  • For the first time, postal rates were increased twice in one year, and before Sept. 11 officials wanted a third increase to 37 cents for a first-class letter early next year.
  • Even before the attacks the postal service was expected to lose $1.35 billion this year.
  • Over the past 30 years of vastly increased economic productivity the USPS has been able to boost efficiency by only 11 percent with automation, according to PostWatch Executive Director Rick Merritt.

Postmaster General John Potter recently asked Congress for $2.5 billion to buy eight irradiation machines to sanitize mail and to cover other bioterrorism precautions. But because the USPS has more than 250 mail-sorting hubs, it would need 2,000 irradiation machines working 24 hours a day to sanitize every piece of mail. Centralizing mail sorting and bar coding all mail would increase efficiency and security, say critics. And if the service lost its monopoly, it could close down inefficient offices and reduce its 850,000-employee workforce.

Source: Brendan Miniter, "Let the Private Sector Go Postal," Wall Street Journal, November 23, 2001.

 

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