Newt Gingrich: If Post Office Wants to Save Money, Change Union Rules

Former U.S. House Speaker Newt Gingrich, who is seriously considering running for the Republican presidential nomination in 2012, focused on a new policy from the U.S. Postal Service in an e-mail sent out to supporters on Wednesday.

A new initiative by the U.S. Postal Service that appears on the surface to be a good deal for customers is, in fact, setting the stage for bankruptcy and a future bailout of the post office with taxpayer money, wrote Gingrich. This week, U.S. Postmaster General Patrick Donahue plans to announce that all future stamp sales will be so-called forever stamps, which can still be used even if postage rates go up.

Anyone who has had to hunt around for 1- or 2-cent stamps to add to their old stamps after an increase may consider this good news, added Gingrich. However, consider the implications of this action. The post office is currently experiencing a severe budget deficit and has been unable to gain approval for a postal rate increase. In addition, they are threatening to stop delivering mail on Saturdays as a way to cut costs.

The post office will try to use any short-term increase in sales from these forever stamps to solve their immediate fiscal problems, continued Gingrich. But if the post office is already having trouble operating at full capacity with current prices, imagine how difficult it will be to do so in five or 10 years after inflation has pushed their costs up and they are selling even fewer stamps because so many people already purchased them in the past.

In fact, this move is setting the stage for a future taxpayer bailout of the post office because it virtually guarantees its future bankruptcy, insisted Gingrich. The low price of stamps is not the reason why the post office is facing such huge deficits. The post office is seeking a 5.6 percent increase in the price of stamps despite an inflation rate of just 0.6 percent. Instead, the post office is facing budget shortfalls because it is unwilling to engage in the necessary reform of its operations necessary in the modern economy.

The post offices union work-rules require it to pay a large group of employees more than a million dollars a week to do nothing, wrote Gingrich. Instead of being able to lay off redundant workers, the post office (and by extension, every American who uses the mail) keeps them on salary through a program called standby time.

If the post office really wants to solve its fiscal challenges, it needs to engage in the difficult work of reforming its operating procedures, including its suffocating and costly union work-rules like standby time, concluded Gingrich. Congress should block the post office from implementing this genuinely dumb move and force it to confront the true cause of its budget woes and implement real reform.