The Postal Service Needs Real Fiscal and Hiring Reform – The American Spectator

The U.S. Postal Service is in rough shape. Despite (misguided) congressional attempts to bring the agency back into the black, Postmaster General Louis DeJoy still projects $60–$70 billion in additional losses through 2030. Postal efficiency has slid in recent years, and the Postal Service’s reputation of delivery through any weather condition has been hampered by service slowdowns. Fortunately, history offers a useful guide to help the Postal Service snap out of its funk. Reforms enacted during the height of the Gilded Age — the last decades of the 19th century — made America’s mail carrier what it is today. The lessons of a bygone era could prove crucial for an agency struggling with stagnation and modernity. Perhaps it’s time to bring back the 1890s, without the horse and buggy.

The U.S. Post Office Department entered the last decades of the 19th century with a plethora of problems. Federal politicians doled out postal patronage jobs like candy, and there was essentially no oversight of Post Office operations. As political science scholar Daniel Carpenter notes, “[u]nder the weight of patronage, a dwindling and feeble inspection force, and a massive deficit, the [Post Office] surrendered much of the political esteem and efficiency” it once had.

Service-related issues turned around dramatically in the 1880s when Congress authorized an army of federal inspectors to descend on America’s mail carrier and closely monitor service. While a lot of the motivation for this was overtly moralistic (i.e., “vice regulation”), in practice the inspectors dealt with bloated agency costs and service shortcomings.  The agency rarely considered all possible bidders when doling out stage contracts for mail transportation, but the inspectors were able to reverse course. Inspectors could seek out far-too-costly contracts and “immediately … receive bids from other stage operators for a new one.” Carpenter also notes that “inspectors searched out lapses in service, and they vigorously regulated subcontracting among stage companies.”

Meanwhile, the passage of the Pendleton Act in 1883 helped end the patronage system by instituting merit-based hiring for federal positions and protecting employees from political retaliation. The rise of meritocracy with a healthy helping of accountability had a dramatic impact on the Post Office. University of California scholars Abhay Aneja and Guo Xu found that postal reform reduced delivery-error rates by 11 percent and significantly boosted postal productivity via higher volumes and lower costs. The postal deficit as a share of revenues plunged from more than 15 percent in 1885 to less than 5 percent around the turn of the century.

The modern-day Postal Service could use a comparable fiscal and productivity boost. While there are certainly inspection efforts at the agency, oversight efforts are a far cry from the Gilded Age regime. Take, for example, the “Highway Contract Routes (HCRs)” that the Postal Service uses to “transport mail between plants, post offices, or other designated points where mail is received or dispatched.” The agency reasonably thinks that private parties are best suited for these tasks and basically reimburses truckers for performing this work. Accurate reimbursements, though, are not possible without surveys to determine route/delivery conditions and equipment/operational requirements that could impact underlying costs. A 2017 report by the Office of the Inspector General found that more than 90 percent of HCR contracts are being renewed without conducting these required surveys. As a result, the Postal Service has incurred hundreds of millions of dollars’ worth of “unsupported questioned costs” related to the HCR process.

The inspector general has also found a less-than-rigorous hiring process for bringing postal workers on board. According to the watchdog, “[t]here are inconsistent practices among the districts related to making final suitability determinations and maintaining adequate justification documentation.” Overall, about one-fifth of employees were hired without evidence of required approval certification. Without stringent hiring practices, the agency cannot know whether it is truly getting diligent employees capable of carrying out mail deliveries.

The inspector general is clearly capable of identifying these shortfalls. But, unless inspectors are regularly out in the field sorting through HCR surveys and vetoing hiring determinations, it is unlikely that anything will change. Congress and postal leadership should work together to create a new framework with more postal revenues geared toward oversight and inspection capabilities. The Postal Service must also resolve to improve and standardize its lackluster hiring process.

The Gilded Age offers a useful, albeit imperfect, blueprint for America’s mail carrier. It doesn’t take a robber baron to see that the Postal Service has real issues that require immediate action.

Ross Marchand is a senior fellow for the Taxpayers Protection Alliance.