A business undone by Congress

For more than a year now, the U.S. Postal Service has sounded the alarm about the financial crisis that is slowly but surely killing it.

The one group with the power to help it stave off disaster couldn't pretend to be less interested.

In the past year, Congress has had time to ponder the content of school lunches, to bemoan the demise of the incandescent light bulb, to grandstand on the national debt and motto, to decry government regulations hampering economic activity.

Yet it has all but ignored the pleas from the postal service, a self-sustaining organization being crushed under the weight of a 2006 law passed by - you guessed it - Congress.

That law required the postal service to prefund retirees' health care benefits at a rate far greater than any other federal agency, an arrangement that might have appeared reasonable when mail volume held steady in the early part of the past decade but has proven much less so in the years since.

Between 2007 and 2011, mail volume dropped 20 percent, eroding the postal service's primary revenue stream and forcing it to tap a line of credit simply to meet its Congress-mandated annual contribution - nearly $6 billion - for prefunding retirees' benefits.

By 2016, the postal service must have $59 billion on hand to cover decades' worth of obligations. It has lost more than $20 billion in four years and assumed about $15 billion in new debt. Its annual contributions to the fund exceed 12 percent of annual revenue this year, and it has already saved $42.5 billion, more than enough to cover all of its retirees.

The 2006 law, of course, isn't all that is preventing the postal service from competing on equal ground in the marketplace. The organization is prohibited by Congress from cutting a delivery day, and it isn't permitted to delve into new businesses to raise additional revenue. Its rate increases for first-class and standard mail are capped at the cost of inflation, so while other businesses raise prices according to supply, demand and other variables, the postal service cannot.

Politicians proclaim constantly that government must be run like a business. But no business is as constrained as the postal service, and no business has a board of directors as incompetent as Congress.

It's little wonder then that postal service officials would announce, as they did this week, that delivery times are likely to be delayed next year. Failing congressional action to relax the prefunding requirement, the postal service's only recourse is to lay off employees (more than 100,000 have been let go in the past four years), shutter community post offices and consolidate operations.

Those are desperate, last-gasp measures made by a business in distress, a scenario that invariably leads to poor decisions, such as the proposal to close Norfolk's mail processing and distribution center and reroute the region's mail to a Richmond-area facility that ranked worst in the nation in terms of delayed delivery.

They are the kinds of moves that will ultimately undo one of the great institutions in American life, a constitutionally mandated network that still allows for hand-delivery of a letter from coast to coast in three days for 44 cents.

It is a decline that would be entirely avoidable, if only Congress would get out of the way.