Response to Taxpayers Protection Alliance

In a recent opinion column, David Williams of the Taxpayers Protection Alliance discussed the Postal Service’s need for the eight vacant seats on its Board of Governors to be filled. We completely agree with Mr. Williams on this point and strongly urge the Senate to confirm the current nominees, most of whom have already been approved by the Senate Homeland Security and Governmental Affairs Committee. A full Board made up of well-qualified Governors with diverse perspectives is best suited to ensure the interests of the American public are represented in accordance with the policies set forth by Congress in the postal statute.

Other points in Mr. Williams’ column warrant further clarification.  For instance, Mr. Williams worries that taxpayers will be called upon to provide a bailout to return the Postal Service to financial stability. Such an outcome is totally preventable through passage of key legislative reforms and ongoing postal leadership initiatives that will put the Postal Service back on a sustainable financial path.

As Mr. Williams correctly points out, the Postal Service receives no tax dollars for operating expenses and relies on the sale of postage, products, and services to fund our operations.  To offset long-term declines in the use of First-Class Mail in particular, the Postal Service continues to aggressively improve efficiency and has reduced our annual cost base by $15 billion since 2008. Despite these cost reductions and strong multi-year growth in package deliveries, however, the Postal Service continues to record unsustainable financial losses due to legislative and regulatory mandates that prevent us from fully adjusting to new market realities.  Indeed, an independent audit by the Federal Trade Commission found that, contrary to Mr. Williams’s claim about “federal subsidies,” the Postal Service’s federal status puts it at an overwhelming competitive disadvantage overall.

Over the past year, the Postal Service has been working with key stakeholders, including our labor unions, our management associations, and a cross-section of the mailing industry, to identify potential critical reforms capable of gaining broad support. One area needing legislative as well as regulatory reform is the Postal Service’s current pricing system, where products that generate roughly 76 percent of our revenues fall under the statutory price cap. In its place should be a pricing system that provides greater pricing flexibility and better reflects the economic challenges facing the Postal Service.

By combining our ongoing legislative efforts with regulatory changes that provide financial stability and greater flexibility, we will be well-positioned to adapt to a rapidly changing marketplace and better serve the American public.

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