USPS: Privatization vs. Bailouts

Chris EdwardsThe economic crisis has highlighted reckless fiscal policies and a lack of foresight by our political leaders. Despite a decade of growth, the federal government ballooned its debt, which has now put the nation in a very precarious financial state. Meanwhile, some state governments saved little money intheir rainy day funds and now the storm has arrived.Similarly, Congress has long ignored calls to reform the U.S. Postal Service, and now the USPS faces a desperate financial crisis. In the past, the Trump administrationproposed major USPS restructuring, as did theCato Institute. But over the years, Congress has blocked even modest cost ‐​saving changes that the USPS has proposed.Iproposed to Congress that it privatize the USPS, which would have given the company the flexibility it needs to weather the Covid ‐​19 crisis. The USPS is in a straitjacket unable to save itself during the crisis because Congress imposes restrictions on costs, pricing, labor unions, delivery, and other operational factors.The USPS is a huge enterprise, with more than 600,000 employees and $70 billion in annual revenues. Revenues are supposed to cover costs, but the USPS has lost tens of billions of dollars over the past decade as mail volume has plunged. Even before the crisis, first ‐​class mail volume was down47 percent since 2001.The head of USPS, Megan Brennan,estimates that losses tied to Covid ‐​19 will be $13 billion this year. She says...
Source: Cato-at-liberty - Category: American Health Authors: Source Type: blogs