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Fundamental Questions for the Future of the Postal Service

Fundamental Questions for the Future of the Postal Service

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Published by: bsheehan on Feb 03, 2011
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Fundamental Questions for the Futureof the Postal Service
February 2, 2011
Prepared by U.S. Postal Service Office of Inspector GeneralRisk Analysis Research CenterReport Number: RARC-WP-11-001
 
U.S. Postal Service Office of Inspector General February 2, 2011Fundamental Questions for the Future of the Postal Service RARC-WP-11-001i
Table of Contents
Introduction ..................................................................................................................... 1
 
Fundamental Questions .................................................................................................. 3
 
1.
 
What is the Nation’s Essential Need for the Postal Service inthe 21
st
Century? ............................................................................................. 3
 
2.
 
Is a Profit-Driven Business or a National Infrastructure BestSuited to Carry Out the Postal Service’s Mission? .......................................... 5
 
3.
 
How Should the Nation’s Postal Service Be Financed? .................................. 7
 
4.
 
What Is the Proper Governance Model for the PostalService? .......................................................................................................... 9
 
5.
 
What Does the Universal Service Obligation Mean? ..................................... 11
 
6.
 
Does Monopoly-Financed Universal Service Assist or Harmthe Postal Service? ....................................................................................... 13
 
7.
 
Should the Postal Service Be Allowed to Expand intoNonpostal Services to Supplement Monopoly Shortfall? ............................... 15
 
8.
 
Should the Postal Service Have Additional SocialResponsibilities beyond Its Core Mission? .................................................... 17
 
Conclusion .................................................................................................................... 19
 
 
U.S. Postal Service Office of Inspector General February 2, 2011Fundamental Questions for the Future of the Postal Service RARC-WP-11-0011
Fundamental Questions for the Future of the Postal Service
Introduction
The U.S. Postal Service is facing a set of critically important decisions. The combinedeffects of the economic downturn, the disruptive consequences of electronic diversion,and a burdensome and flawed retiree health care prefunding schedule have contributedto $20 billion of losses in the past 4 years. The Postal Service expects that it will nothave enough cash to meet its payment obligations in 2011.Less urgently, but of more importance in the long term, communications and parceldelivery have undergone radical transformation in recent years, yet the Postal Servicehas not modernized or been permitted to update important aspects of its mission toreflect the impact of globalization and the digital age. Instead, the Postal Service hasbeen required to stand still in the middle of a revolution in the access and use ofinformation.In this emerging environment, neither the Postal Service’s traditional functions nordigital age infrastructures offer perfect solutions to Americans’ needs. Both informationservices and physical delivery are important, and determining the right course for thePostal Service’s next 10 or 20 years is difficult. Nevertheless, decisions about the PostalService’s future will be required very soon, and debates have yielded few definitiveconclusions.We believe there is a need to step back from the immediate issues and take a deeperlook at unanswered foundational questions concerning the role of the Postal Service.The answers to these questions can serve as beacons to navigate into the future. ThePostal Service faces an array of conflicting and even contradictory mandates. Without asolid foundation to guide the transformation of the postal system, there is a risk offurther piecemeal changes that will simply add to the confusion.This paper poses eight fundamental questions that we believe are critical fordetermining the role of the Postal Service in the 21
st
century. We discuss somealternatives for responding to these questions, but we purposefully do not suggestanswers. There are many possible answers. Policymakers, especially elected officialsrepresenting Americans, should engage in a disciplined, deliberative process to reachdecisions about these foundational issues. The questions and some alternatives appearin Table 1. Clear and decisive responses to these fundamental questions are needed todevelop a coherent, consistent postal policy for the present and the future. A failure toreach agreement will frustrate efforts to find a long-term strategy for the Postal Service.Any plan will lack the stability of consensus and fall prey to the same endless historicaldebates.

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