The US Postal Service should stick to postal products and remain barred from expanding intoother product areas, according to a report by right-wing Washington policy group the Institute for
Research on the Economics of Taxation (IRET).The IERT, which believes in restricting government to a limited set of core functions, concludedthat while postal operators in other countries had successfully branched out into areas such asfinancial products and services to supplement their earnings, USPS’s past record of failure inthese kinds of commercial ventures meant it should not be allowed to do so.
Its findings come just weeks after a report by The Office of Inspector General (OIG) of theUnited States Postal Service recommended that the Postal Service “should consider offeringnon-postal products and services suggested by stakeholders and those offered by foreign postalsystems to generate revenue”, where a business cases exists.
The IERT concluded: “If USPS had not failed in numerous past non-postal ventures, it would havea significant presence today in non-postal markets, much like many foreign posts. Congress wasresponding to those previous disappointments when it decided, by overwhelming bipartisan majoritiesin both houses, to bar USPS from selling new non-postal products.”
It said Congress was also mindful of concerns that allowing the Postal Service to move intocommercial markets outside its government-assigned mission of mail collection and delivery wouldharm the broader economy.
“The billions of dollars the Service is losing in the postal market do indicate the urgent needfor postal reforms — less government micromanagement, a stretching out of retiree health carefunding, and perhaps a special across-the-board postal rate increase — but the mammoth losses arenot grounds for changing the law to let USPS expand into non-postal markets,” it insisted. “Ifanything, the sea of red ink is a warning that new non-postal commercial ventures would probablyend badly.”
It added that when looking for new revenue and income sources, the Postal Service would dobetter to concentrate on the postal marketplace.
“The Service can put its infrastructure and expertise to good use there by developing innovativepostal products, with the further advantage that the products would support its central mission,”the report maintained. “Current law generally permits the Service to develop and market new postalproducts, subject to regulatory approval, but one useful, although minor, statutory change would beallowing the Service to deliver packages containing beer, wine, and distilled spirits. Anotherreasonable area for expansion is partnering with other government services to make governmentservices more accessible and cost effective, provided the Postal Service is fully compensated forits costs. Current law and regulations arguably permit such governmental partnerships already, butlegislation explicitly authorising them would not hurt,” the IERT concluded.
In 2009, the Postal Service asked Congress to change the law so that it could offer non-postalproducts and services to generate additional revenue. Several bills have been introduced inCongress to change current laws and allow the Postal Service to sell new non-postal products andservices.
In addition to removing prohibitions for selling non-postal products and services, these billssuggest new products and services the Postal Service could offer in order to generate revenue.These suggestions include:
Public Internet access services; notary services; advertising at Postal Service facilities andon Postal Service vehicles; banking services such as cheque cashing; facility leasing andwarehousing services.
