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Stamp of approval

Maryland received something of a surprise honor this week with the unveiling of a Forever Stamp honoring Assateague Island National Seashore and its wild ponies, one in a series of 16 commemorating the 100th anniversary of the National Park Service. It's a stunning photograph of two wild ponies grazing on the island's marshland at sunset, a tribute to the natural beauty of the 37-mile-long coastal island shared by Maryland and Virginia.

Yet while this stamp and its haunting image will last forever — if not as first-class postage then at least in the hands of collectors — the same can't be said of the U.S. Postal Service. Last month, USPS reported its operating budget was $2 billion in the red after recording a modest $576 million profit in the first quarter of the fiscal year.

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That's both better and worse than it sounds. The organization's budget woes stem, in large part, from an oddity of accounting that requires it to pre-fund health benefits for future retirees, a burden not shared by its peers. It also suffered from a rollback in rates — a 2-cent reduction in the price of a stamp as of April 10, the first such reduction in 97 years and one that could cost billions in lost revenue.

Neither decision makes much sense, does it? Well, that's pretty much par for the course with the Postal Service, which has been forced by Congress to run like a business — until it's time to raise rates or reduce services as a private company might to stay financially afloat, and then its hands are tied. Add to that mix the rise of email and the sharp decline in first-class mail, and it's been clear for years that current practices aren't sustainable.

Sen. Tom Carper, the Delaware Democrat who has been a champion of USPS reform, has warned that the losses will grow worse unless Congress acts. What's frustrating is that those fixes are relatively simple — most of them merely require Congress to lift the conflicting mandates that have forced the Postal Service into its increasingly dire circumstances.

Resolving the retiree health care dilemma should be high on the list. Senator Carper has noted that much of the savings could be accomplished by shifting retirees to Medicare for health insurance where possible, allowing USPS to set rates more in line with its costs and giving the organization greater product flexibility and opportunities for innovation — to be able to compete with private delivery firms FedEx and UPS, which offer incentives like volume discounts.

Unfortunately, Congress tends to keep a more narrow and self-interested focus — no member wants to see a post office close in his or her district, nor will they support broad rate increases (ignoring that USPS might be the cheapest letter delivery service in the industrialized world) because their constituents hate them. Yet there's more at stake in this debate then whether the Postal Service can maintain employee benefits or shorten lines at post offices or even resolve its projected $2 billion annual deficit.

The nation's growing e-commerce still relies on postal carriers for delivery, and USPS is the only carrier that will deliver to everyone. The U.S. mailing industry is a $1.4 trillion enterprise that provides jobs for more than 7 million workers. That's too large a chunk of the nation's economy to be monkeying around with — especially when that domestic economy is looking as soft as the latest jobs report (a meager 38,000 gained in May) suggests.

Alas, the longer Congress waits to act, the worse the Postal Service's circumstances are going to get. Perhaps the biggest mistake would be to regard the organization as irredeemable when it isn't. Hidden in the latest red ink are some potentially good signs on the revenue side — first class mail is no longer in steep decline, and the demand for package services had workers logging 9 million more hours on the job over the last three months.

The Assateague stamp is a lovely image, but perhaps the best purpose to which it might be put is to send letters to members of Congress urging them to pass USPS reforms they should have delivered years ago.

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