The U.S. Postal Service might rightly be considered the sick man of government agencies. It's squeezed between two immutable facts: The U.S. Constitution and federal law require it to operate everywhere in the country, without discrimination; and its core business, delivering first-class letters, is inexorably going away.
One other factor in the Postal Service's chronic deficits is as artificial as they come. It's a 2006 law that required the service -- almost alone among public and private enterprises -- to pre-fund its entire future liability for retiree healthcare expenses. The payments totaled $38 billion through 2011, with further installments of between $5.6 billion and $11.1 billion a year due through 2016. The Postal Service has been consistently defaulting on these obligations as it continues down a road that has taken it (as of fiscal 2014) to eight consecutive annual losses totaling more than $52 billion.
Brookings Institution scholar Elaine C. Kamarck has just issued a paper (spotted earlier this week by Lisa Rein of the Washington Post) aimed at solving what she calls the "political stalemate" over the Postal Service. "The USPS exists right now in never-never land," she said in an accurate diagnosis. "It is not fully public and it is not fully private."
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