How the Post Office Is Being Destroyed By a Phony Budget Crisis [View all]

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from OnTheCommons.org:



How the Post Office Is Being Destroyed By a Phony Budget Crisis
Congress, not the post office itself, is the problem

May 25, 2012 | by David Morris


As every 6 year old learns, there is real and there is make believe. The massive Post Office deficit that is driving its management to commit institutional suicide by ending 6-day mail delivery, closing half of the nations’ 30,000 or so post offices and half it’s 500 mail processing centers, and laying off over 200,000 workers, is make believe.

Here’s why. In 1969 the federal government changed the way it did accounting. It began to use what was and is called a unified budget that includes trust funds like social security previously considered off budget because they were self-sustaining through dedicated revenue.

At that time the Post Office was, as it had been since 1792, a department of the federal government like the Department of Energy or the Department of Agriculture. While generating most of its revenue from postage it also received significant Congressional appropriations.

In 1970 Congress transformed the Post Office into the U.S. Postal Service (USPS). The new quasi-public agency was intended to put the Postal Office on a more business like footing. The Postal Service was given was allowed to borrow to make needed capital investments and was given more flexibility in how it spent its money. In return Congress required the Postal Service to become self-sufficient. The subsidy, at that time running about 15 percent of total revenues (close to $10 billion a year in 2012) was phased out over the next 15 years. After the mid 1980s the only taxpayer funds involved in the Post Office, amounting today to $100 million a year, subsidizes mail for the blind and official mail to overseas voters. ....................(more)

The complete piece is at: http://onthecommons.org/magazine/how-post-office-being-destroyed-phony-budget-crisis