CAGW Urges Five-Day Service after More Postal Losses

WASHINGTON--(BUSINESS WIRE)--Today, Citizens Against Government Waste (CAGW) issued a statement insisting that the United States Postal Service (USPS) be granted the authority to cancel Saturday delivery, close excess postal facilities, and take more aggressive managerial action to shore up its finances in the short run. The statement came in reaction to the national mail service’s staggering loss of $2.2 billion in the first quarter of 2011, after losing $8.5 billion in fiscal year (FY) 2010. Estimates of the savings that would result from moving to five-day service range from $1.7 billion (Postal Regulatory Commission) to $3.1 billion (Postal Service) annually.

“Eventually, the USPS monopoly should be eliminated”

As American society shifts to a heavier reliance on electronic-based communications, the USPS model has become increasingly antiquated. An April 12, 2010 report by the Government Accountability Office stated that the USPS business model “is not viable due to USPS’s inability to reduce costs sufficiently in response to continuing mail volume and revenue declines.” Decreased demand has resulted in dwindling incomes; first class mail, which makes up more than half of USPS revenue, peaked in 2006, and fell 20 percent over the next four years. With more than 600,000 employees, the USPS ranks as the second-largest employer in America, trailing only Wal-Mart. On April 22, 2010, Postmaster General John Potter announced that the USPS will lose $238 billion over the next ten years.

“The Postal Service has never been run like a private business,” said CAGW President Tom Schatz. “If it were, it would have gone under long ago. But that does not mean that the USPS should avoid taking steps to prevent the continued hemorrhaging of taxpayer dollars. Eliminating Saturday delivery is far from a sufficient long-term solution, but it would be an important step in limiting the amount for which taxpayers will be on the hook in the future. It would also send the message that the USPS is more than just a jobs program.”

“Eventually, the USPS monopoly should be eliminated,” added Schatz. “Great Britain, Finland, New Zealand, and Sweden have eliminated their government monopoly on mail service, and Germany and Holland privatized their postal delivery services. U.S. taxpayers would benefit from similar measures. Even President Obama has recognized the problem. On August 11, 2009, he stated, ‘If you think about it, UPS and FedEx are doing just fine. It’s the Post Office that’s always having problems.’”

Citizens Against Government Waste is a nonpartisan, nonprofit organization dedicated to eliminating waste, fraud, mismanagement and abuse in government.