Copyright 1999 Phoenix Newspapers, Inc.
THE ARIZONA
REPUBLIC
January 13, 1999 Wednesday, Final Chaser
SECTION: OPINIONS; Pg. B7
LENGTH: 662 words
HEADLINE:
WHAT'S THE POSTAL SERVICE DOING WITH ALL THAT MONEY?
BYLINE: By Anne M. Northrup
BODY:
On Sunday, the U.S. Postal Service raised the
price of first-class stamps 1 cent - from 32 to 33 cents. It is still one of the
best bargains in America - or is it?
This single penny per stamp will
generate an additional $1 billion for the Postal Service. Added to the more than
$5 billion surplus the Postal Service has generated over the past five years,
the figures take on proportions not often discussed outside the Pentagon. Where
does it all go?
The Postal Service has a positive spin on the story. It
is the first postal rate increase in four years. It says it is the right amount
at the right time, and across all classes of mail, the rate hike averages less
than 3 percent. The Postal Service even says its customers - the American public
- earned an $800 million dividend because it delayed the increase for six
months!
What the Postal Service news releases do not say with much
specificity, however, is why this quasi-government agency needs the additional
funds on top of those record surpluses. I think we have a right to know.
Federal law requires the Postal Service to set rates to cover the costs
of operating the postal system - in other words, to deliver the mail. There is
no denying that postal "service" has gotten better and is the envy of every
other Western nation. For improving service and creating efficiencies that led
to surpluses, the Postal Service employees and management are to be commended.
But recent reports suggest the Postal Service has gone far beyond its
core mission of universal mail delivery, financing new "business" ventures with
surpluses from the price of first-class stamps. Many of these ventures have been
dismal, money-losing failures.
Last month, the General Accounting Office
criticized the Postal Service for losing $84.7 million on new ventures that went
far beyond its core mission. Selling long-distance phone cards, coffee mugs,
T-shirts and neckties as well as expanding into other areas traditionally
non-postal were some of the activities criticized by the GAO. Many of these
ventures threaten private-sector companies already providing these services.
There is more evidence that the Postal Service is spending less time
focusing on delivering mail to gain customers in areas already well-serviced by
private industry. The Postal Service spent more than $265 million in advertising
last year, and the majority was spent to promote its expedited and overnight
mail service.
Yet just last month, facing a lawsuit, the Postal Service
dropped its advertising campaign that pointed out how costly it is to use its
competitors' overnight and express mail services. What the ads didn't say was
that the Postal Service requires private-sector delivery services like Federal
Express and United Parcel Service to charge two times its rate for the same
product.
Setting your competitors' prices is bad enough, but spending
tens of millions of dollars to advertise is an example of a government monopoly
at its worst.
In June 1998, Congress overwhelmingly passed a non-binding
resolution opposing the rate increase after the Postal Rate Commission raised
concerns about the validity of the budget estimates. However, the Postal Service
Board of Governors overrode our objections and raised postal rates anyway.
It is time for Congress to take a hard look at how the Postal Service is
operating and figure out how to make it more accountable to every citizen and
every business that depend on the mail. Postal reform
legislation took a few baby steps in Congress last year, and I am optimistic the
new Congress will make it a priority.
Before the Postal Service
increases the cost of stamps, it needs to demonstrate a need and tell the
American people where its funds are now going. And if, through smart management,
productive employees and investment in new technology, the Postal Service gets
even more efficient, maybe we can even consider a postal rate decrease.
Now that would be a real bargain.
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January 14, 1999 
