Postal Service Budget Shortfall is Artificial: Congress Needs to Correct Legislation to Get It Right

Most of the American public is now aware that the cost of sending a first-class letter jumped up two cents to 39 cents. Other rates were also changed, too, but for our purposes here, the rate increase affecting the most people will be the first-class rate hike.

According to the USPS, there will also be another rate hike in 2006.

Why? The Post Office is already a huge moneymaker for the government.

A few years ago, Congress had concerns that the USPS coudn't handle it's own money, and the post office had already made record profits (to the tune of $70 billion) that particular year. Congress passed a law that required extra moneys made to be put into an escrow account. So the postal system starting making regular deposits in this account.

That particular legislation expired in 2004, but still remains in effect until new legislation is passed. The problem is that the payments are now cutting into the profits that the postal system makes and has caused the Postal Service to go into negative territory, necessitating the need for rate hikes that are being paid for by the American public.

So with this hike and the next one, rates will have gone up by (up to) 15% in two years.

Two bills that fix the problem are in Congress, but they are stalled.

They ought to consider getting rid of the escrow, and LOWERING the rates for the American public. But there's no way that that will happen as the government likes the escrow as it is recorded as income for them. Yet the postal service belongs to them, so their profits end up with the government regardless. So what is the problem?

Health care? That can be paid for out of the huge surplus that they will be making. They will still have a huge surplus after health care costs are deducted too.

The feds created this problem; they should now fix it and quit screwing the American public.