Felix Salmon

The fight between the Post Office and Congress is a very peculiar one. Normally, when the government owns some incredibly profligate business, it’s Congress which tries to impose efficiency gains and fiscal discipline, while the business insists that all of its spending is absolutely necessary and that it has already cut to the bone. In this case, however, the roles are reversed: the Post Office wants to change, and it’s Congress which is stopping it from doing so.

The latest move from the Post Office is a bold one: to abolish Saturday delivery unilaterally, starting August 1. This is a bit like Citicorp announcing that it was merging with Travelers: it’s illegal, but that’s not going to stop them, and the clear expectation is that somehow Congress will make it legal, before or shortly after it happens in reality.

As Jesse Lichtenstein details in his amazing 10,000-word Esquire story about the Post Office, the organization does actually have a detailed plan for becoming fully self-reliant over the next few years. Abolishing Saturday delivery is just one small part of that plan; all of it, by law, requires Congressional buy-in. The plan may or may not be successful, but, as they say, plan beats no plan. The big problem is simple, but huge: Congress isn’t playing along, and instead is just making matters worse, unhelpfully micromanaging everything from postage rates to delivery schedules to health-care contributions.

That’s why I love the idea of the Post Office doing something that’s clearly illegal, putting the ball squarely in Congress’s court. The idea is both delicious and dangerous: go ahead an implement the plan whether Congress likes it or not. And then dare them to bring down the hammer, or simply capitulate to the inevitable. They might not like the latter option, but the former would surely be worse for all concerned.

Today’s announcement says to me that relations between the Post Office and Congress have deteriorated so much that the Post Office has given up on getting Congressional buy-in for its plans. At the same time, the plans are necessary (sufficient is a different question) if the Post Office is going to survive for decades to come. And so the Post Office is just going ahead with what needs to be done, and has decided to treat Congress as an adversary, rather than as a key partner in its evolution.

The risks of this move are obvious: Congress is the government, and has awesome powers, should it choose to use them. But there’s a very good chance, here, that Congress will blink first, and end up giving the Post Office at least some of what it wants. Including five-day delivery. Sometimes, you’ve got to get tough with those legislators.

I like the fact that the NYT splashed Steven Greenhouse’s article on the Post Office’s woes all over its front page yesterday. There’s not much new here, but it’s a huge and important story and the public is far too ignorant of it.

“The causes of the crisis are well known,” writes Greenhouse, “and immensely difficult to overcome.” This is true. And the big one — the secular shift from snail mail to email — is not something that Congress can do anything about. But just look at how Congress is tying the Post Office’s hands behind its back here — and not just by forcing it to pay $5.5 billion per year into a retiree healthcare fund.

The law also prevents the post office from raising postage fees faster than inflation…

In some countries, post offices double as banks or sell insurance or cellphones. In the United States, the postal service is barred from entering many areas…

The postal service is also asking Congress for permission to end Saturday delivery.

It seems to me that a significant part of the problem here lies with Congress and that a massive bout of deregulation could be just the solution that the Post Office is looking for. Congress is micromanaging the Post Office, telling it how much it can raise postage rates, telling it that it can’t offer financial services (despite its huge business in money orders), telling it that it can’t get into all manner of other businesses either and telling it that it has to deliver mail on Saturdays. Astonishingly, amid all these rules and regulations, the Post Office is losing billions of dollars.

I see a lot of scope for bipartisan agreement here — unshackle the Post Office so that it has a hope of serving the country indefinitely into the future. Republicans like deregulation, right?

The problem, I think, is that for all that Republicans like deregulation, they really hate the idea of a state-owned organization competing with the private sector. Of course, the Post Office does that already — it competes with FedEx and UPS. But the USPS, as a government-subsidized organization with thousands of locations nationwide and a massive reserve of public trust, could be a formidable competitor in all manner of different markets and none of the incumbents in those markets would welcome the competition.

Over the long term, however, I suspect that the only way to save the Post Office will be to allow it to move into financial services. There’s a lot of expertise in the rest of the world when it comes to the questions of how to set up and run a post bank. Meanwhile, banks in the U.S. are mistrusted and disliked and many people would love to be able to just bank at the Post Office instead.

It might be too late now to set up a post bank — but I doubt it. (This is still a country, after all, where most people still use paper checks.) There’s a window of opportunity here. Let’s grab it, before it’s too late.