Return to Sender: Reforms for the Failing Postal Service


Post-Event Summary
The United States Postal Service (USPS), a landmark US institution, has run out of money, and only significant reforms can save it. USPS experts gathered at a lunch briefing at the American Enterprise Institute on Friday to discuss the causes of the institution’s financial woes and potential solutions. Richard Geddes, an AEI visiting scholar who urged for postal reform in his 2003 AEI Press book “Saving the Mail,” presented his updated policy recommendations to address the USPS’s current situation. He pointed out that this is a fiscal crisis with a fundamental change in market demand because of increased use of electronic delivery methods and as well as environmental concerns that have resulted in a significant decline in physical mail volume. He also mentioned the change in mail composition, with 90 percent of mail now being sent from businesses for commercial purposes. Geddes argued that the USPS is not ready for privatization, but that corporatization would be a better option and would allow for both transparent subsidies and competitive delivery costs. Discussants and USPS experts Jim Campbell and Michael Schuyler agreed with Geddes that the business model is outdated, privatization is premature, and better cost management is necessary. John Waller, former director of the Office of Accountability and Compliance of the Postal Regulatory Commission, objected to the idea of contracting out the postal service to the private sector, warning that Americans are not ready. His solutions for reform included a better pension payment schedule, reduced service standards, reduced labor, closing excessive facilities and expanded job sharing.

Event Description
The United States Postal Service (USPS) has run out of money, as evidenced by its failure to make a $5.5 billion payment to the US Treasury Department on September 30, 2011. That payment has been deferred until November 18, 2011, but there is no reason to believe the USPS will be in better financial position then. At this event, AEI visiting scholar R. Richard Geddes, who urged for postal reform in his 2003 AEI Press book “Saving the Mail,” presents an updated policy paper that assesses the USPS’s current situation and argues for long-term, concrete reform. He argues that, to avoid perpetual taxpayer bailouts, the venerable institution must evolve into a firm structured more like a private business. USPS experts Jim Campbell and Michael Schuyler responds.
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About the Author


R. Richard
  • Rick Geddes is associate professor in the Department of Policy Analysis and Management at Cornell University. His research fields include private infrastructure investment through public-private partnerships, postal service policy, corporate governance, women's property rights, and antitrust policy. He is a Research Associate at the Mineta Transportation Institute, and a visiting scholar at the American Enterprise Institute. He was a Fulbright Senior Scholar at Australian National University in Canberra in the fall of 2009, and a Visiting Researcher at the Australian Government's Productivity Commission in the spring of 2010. His research focused on Australian public-private partnerships in both positions. Geddes teaches courses at Cornell on corporate governance and the regulation of industry.

    In addition to his teaching and research at Cornell, Geddes served as a commissioner on the National Surface Transportation Policy and Revenue Study Commission, which submitted its report to Congress in January 2008. He has held positions as a senior staff economist on the President's Council of Economic Advisers, Visiting Faculty Fellow at Yale Law School, and National Fellow at the Hoover Institution at Stanford University.

    In 2008, Geddes received the Kappa Omicron Nu/Human Ecology Alumni Association Student Advising Award. His published work has appeared in the American Economic Review, the Journal of Regulatory Economics, the Encyclopedia of Law and Economics, the Journal of Legal Studies, the Journal of Law, Economics, and Organization, the Journal of Law and Economics, the Journal of Law, Economics, and Policy, and Managerial and Decision Economics, among others.

  • Email: [email protected]

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