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Heritage Foundation Senior Research Fellow James Gattuso and Cato Institute Budget Analyst Tad DeHaven on the U.S. Postal Services mounting debt.
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Well the United States Postal Service on the brink of disaster defaulting on its bills for the first time in history.
The cash strapped agency failing to come through one -- five point five billion dollar payment to fund future health benefits for retired postal workers.
And another payment due in September is likely to meet the same day.
Here with me now James -- to -- senior research fellow in regulatory policy policy that is -- Heritage Foundation and tad to haven.
Budget analyst with Cato Institute welcome -- you both James I'll start with you.
Whose fault is this.
Well ultimately it is -- -- job whose fault.
We're -- did it did indeed it unity Internet Bill Gates is perhaps -- Al Gore I bumped up off.
Stood at the bottom line here is that people are not using the mail anymore they're they're they're not send the letters are not sending.
Right first.
That there really declining.
My -- I mean at the end of the day you can't blame the invention the end -- the Internet right I mean this has been horribly mismanaged.
Very ultimately it's it.
But ultimately it's congress' fault congress.
Is in charge of the the massive mail operation this country.
Jerry congress would screw up -- two car funeral that's -- so in the 21 century as Jim just said.
With the Internet.
The telecommunications.
Revolution.
What is called for now -- dramatic.
Revision.
And you know sort of progressive look to the future of of what we want in this country.
The Europeans have been -- that's for two decades other hedges -- -- one -- liberalizing their postal markets injecting competition getting private capital are all.
It's unfortunate it.
James do you know you know there's also this issue -- legal obligations that the USPS faces they have to pre fund -- -- the retirement benefits.
That's a big deal that's what this money is is this unfair that they have to do -- -- it was this the right thing -- -- -- All congress did was require the Postal Service to two pay for their obligations that that it incurred.
It is incurring obligations for retirement for health care benefits for retirees.
Which must be paid any congress -- to the Postal Service.
You have to pay it you have to provide the money it to be put aside so that when when it is -- it it has repaid.
With a positive -- -- our views animated to fund operating expenses.
Instead of reform itself and in giving its operations in into it for.
There isn't very warm enough.
Can you reform the USPS and make it work.
Well.
There's two things that need to be done first is cut back on expenses to introduce solve some of the of the -- The cash flow which is kind of like a week.
Cash for for for the Postal Service.
A lot of secondly I secondly -- the the Postal -- has a -- new business.
In just recently is that I'm -- can't -- the one they got.
I I don't think anyone -- -- -- -- when they did that they have been in the course of much of the last wondered did did you have a shot.
And jump in here at -- I was asking -- -- reform is a possibility.
Should they get into new lines of business like James is suggesting here.
Now via the Postal Service has a terrible track record when -- gets in the non postal products and and factors -- postal analyst Michael show they're just had -- paper out this week.
Looking at the history.
Looking it's what you know overseas these private -- postal.
Companies have gotten into different lines of business -- they've diversified.
But that requires money up front to get into these new lines of business.
Where's the money they'll come from -- -- really want the government and repeating what spot private banks private insurance companies know it.
They add -- looking -- are are we need to be asked for a -- I mean is that what's gonna happen that's what I see in the future.
And why the heck can we just shut this thing down it's not working.
Well first off where we have -- -- for bail -- -- well we have been asked if there was a bit odd given today in the four point 55 point five billion dollar payment that was not handed over.
They'll be another five point six billion dollar -- next month without things -- made so we're in the the the area of the odds are ready.
The problem is that they ought implies that there's there's money there that is provided and if -- -- get back on its feet.
The processors will not get back on his feet.
-- they've -- right this is to deliver emails.
So wonderful job -- why not shut down you -- -- that that might be would have to be done.
But I -- I think first we have to give it -- there's every opportunity to to make -- business sensible.
To allow it to kind learn how long they've been around -- -- -- the country -- thank you.
A little -- -- is -- -- -- value is there won't tell until we have theory here.
And there's still economic value people still want mail businesses do you account for most of the -- volume anyhow.
The question is do we still need this government one size fits all model where you have delivery six days a week and a universe a uniform stamp price.
Let people decide they want -- three days a week perhaps a pay a premium for seven days a week but we don't know because the government sets prices and services -- -- -- of allowing market forces to work.
Woman that's innovation we need instead new lines of business that would be difficult for the USPS to deal maybe -- Reformat how we charge for product.
-- I think you might -- are part of the answer their Fujifilm devout.
-- wish fulfillment of their chemicals Western -- development -- -- into.
Money for insurers.
But this kid did did the key is -- processor is separate from the government though I mean I do agree with the other guests had shifted to the government still controls -- postal service of their baptized there.
And then give you new lines of business is a problem so we have to cut -- -- there and went to -- service explore new areas -- I'm your business records I'm.
They're more taxpayer dollars and our future I think for coming -- tonight that was an -- -- conversation and that clearly this story's gonna drag on for awhile so we'll have you back thanks so much.
Thank you --
