The U.S. Postal Service

Typically, when most individuals think of government functions and services, a few basic things come to mind first, like roads, defense, and postal delivery. This latter function, however, has been an ongoing source of discussion and debate, specifically with regard to the U.S. Postal Service's legally established monopoly and universal service obligations. This debate has taken on greater importance with the Postal Service's recent financial struggles. According to this recent report from the Congressional Research Service:

Recently, the USPS has experienced significant financial challenges. After running modest profits from FY2004 through FY2006, the USPS lost $5.3 billion in FY2007 and $2.8 billion in FY2008. In May 2009, the USPS warned that it might experience a cash shortage at the end of September 2009. Two months later, the Government Accountability Office added the USPS’s financial condition “to the list of high-risk areas needing attention by the Congress and the executive branch.”

The report goes on to say that Congress provided a temporary legislative fix to the budget situation by postponing a portion of the Postal Service's required contribution to its retirees' health benefits fund, but that significant uncertainty exists in the Service's future, and the coming years may see increased postage rates or even a delivery reduction from six mandated days a week to five.

In fact, this topic is not unfamiliar to the George Mason community. Two years ago, an expert panel led by Mason School of Public Policy faculty members Dr. A. Lee Fritschler and Dr. Christine Pommerening delivered a major report to the U.S. Postal Regulatory Commission on many of these issues. From the SPP website:

The study's goal was to analyze the current scope and standards of universal service obligations and the postal monopoly under which the U.S. Postal Service (USPS) operates. The study considers how these obligations and monopoly rules might change in the future. The results consist of separate analyses of legal rules and statutes, historical trajectories, international experiences, economic and econometric models, public needs and expectations, and policy options regarding the USPS, universal service obligations, and letter and mailbox monopolies.

The full report, available from the Postal Regulatory Commission here, provides an enormous amount of information about the Postal Service and related policy. In the final appendix, the report provides several dozen policy options. A good overview of many of the relevant issues and some report conclusions was written by Dr. Fritschler for the Huffington Post here.