PD Editorial: Creating a 21st century Postal Service

Overnight delivery and broadband Internet service have yet to reach many of the far-flung corners of rural America. For those small towns, snail mail remains a vital link, and the local post office doubles as the community center.

So it was welcome news to the denizens of Camp Meeker and Villa Grande, as well as in some 3,700 other communities across the country, when the U.S. Postal Service scuttled plans to close their local postal stations. The agency instead will reduce hours at those offices and thousands of others.

That the reprieve arrived via email is a reminder that the Postal Service is struggling to survive in a world that's grown accustomed to instant communication.

The agency's challenges are well known: The volume of first-class mail is plummeting as people increasingly pay bills online and text messages replace ink-on-paper letters and even email.

Meanwhile, the ink on the other side of the Postal Service's ledger is decidedly red, with reported losses of $6.5 billion in the first half of this fiscal year. That pencils out to about $36 million a day.

But the obstacles aren't only technology and an oversized workforce. There also are politics and procrastination. Congress has imposed costly mandates while micromanaging operations, and despite repeated pleas, it has failed to take up proposals to cut tens of millions of dollars in postal expenses.

For all its problems, the postal system still generates about $60 billion a year in revenue - a little more than PespsiCo. Its challenge is to bring its expenses back in line.

To that end, postal officials want to end Saturday delivery, raise rates, reduce the workforce by 200,000 people and shutter some facilities. They argue that the agency can return to profitability.

Separate measures in the House and Senate would delay, and potentially block, post office closures. That may explain why the agency dropped plans to close 3,700 rural post offices, saving $200 million a year. The new plan, shorter hours at those offices and thousands more, will save

$500 million.

But there will be no reprieve for 250 mail processing centers, including two in Petaluma, that are scheduled to close over the next two years, saving roughly $1.3 billion a year. That's going to mean slower mail service in the North Bay, and 350 workers will lose their jobs if they can't transfer elsewhere.

Congress should proceed with caution on two aspects of the plan: allowing the Postal Service to tap a pension fund that's presently overfunded by $11 billion and reversing a six-year-old requirement to pay retiree health care costs in advance - a $5.5 billion expense not faced by another other federal agency. Of course, no other agency is facing the financial challenges of the Postal Service.

The real challenge is to design a Postal Service for the 21st century, with continuing service in rural areas that lack alternatives, the ability to make changes without congressional approval and revenues that are aligned with expenses.