on Feb 22nd, 2012 in Strategy & Public Policy | 36 comments
 

If you pay any attention at all to legislative efforts to address the Postal Service’s financial crisis, you’ll soon hear the phrase, “budget score.” Someone will say that a bill has a high score or a low score. But what is a budget score? What is the score for?

Budget scoring is part of a broader process to keep federal spending in check. The Congressional Budget Office (CBO) assigns scores to bills to show how they will affect the federal budget deficit. (Unlike most sports, a high budget score is usually considered bad.) Even though Congress placed the Postal Service off budget in 1989 and the Postal Service does not receive federal money for operations, the Postal Service often gets caught up in budget scoring concerns for two reasons: The first is off-budget spending is included in the overall measure of the budget called the unified budget. The second is that the Postal Service is required to pay in funds for pensions and retiree health benefits to certain on-budget accounts.

The OIG described the history of the Postal Service’s entanglements with federal budget concerns in the 2009 white paper, Federal Budget Treatment of the Postal Service. The paper showed how these entanglements stymied the ability to enact postal legislation – even legislation that would return the Postal Service’s overpayments.

In a new paper released today, Budget Enforcement Procedures and the Postal Service, the OIG updates budget events since the 2009 paper and places budget scoring and the federal budget treatment of the Postal Service within the context of the federal budget process.

Most of the Postal Service’s operational spending is off budget and not subject to the federal budget process. The OIG argued in 2009 that the Postal Service’s retiree benefit accounts should also be off budget and disentangled from the federal budget. Until that happens, however, it is important that the Postal Service and its stakeholders understand how the budget process and budget enforcement work. This paper attempts to explain these processes and how they can affect legislation.

What do you think about budget scoring and the Postal Service? Comment below.

This blog is hosted by the OIG’s Risk Analysis Research Center.

Comments

It Seems to me that the Priority of the Post office was to deliver mail, in a timely matter. Now that is the Bottom Priority of the post office, if it is even on the list... Maybe it is Time for the Post office to close it's doors, stop delivering mail, fire everyone and build a new postal service from Scratch, then maybe you could build a postal service that could be profitable, even with these mail sorting center closings, there is nothing that will save the postal service money, unless they have figured out how to put more automation into mail sorting, other than breaking the union and causing people to move to the new centers, and more fuel to transport mail to the new centers... no savings. the post office needs new management!! or allowed to FAIL, and go away.

As a die-hard of the USPS, I dispute it's annihilation and have full faith it will fulfill its mandate. Superficially the USPS many seem like it's obsolescing or in financial trouble. That's not the case if ever there is an America. The USPS is in for it's mandate.

The post office cannot be allowed to fail. It simply needs an overall. The business model works; ex: UPS, FEDEX and DHL. The problem I see is that they have too many post offices. They need central hubs and to deliver the mail in a cost effective manner.

Thank you for your time,

Keith Gilabert

Right on! While the postal service talks of how it is important to the communities and how they want to be compensated just like other businesses, it really should be treated the same as any other business.

In the company that i work in - if we (the company) do not turn a profit we lay people off. Plain and simple.

It would be terrific to work for a company that looses billions of dollars a quater and still get a pay check. Are these people insane?

The union runs the post office because their is nobody in management to stand up to them. Gutless people are in management and yet the Postal Service wants Congress to offer help.

If I were an employee of the postal service I would be preparing myself for another job. Then when they come out to the real world they would know just how tough it is to be productive.

The offices that should stay open are the ones that can turn a profit after paying all its bills and salaries. If it can't then they should do whatever is necessary to be profitable - like lowering salaries, cutting benefits, hiring outside contractors with no benefits but a little bit higher salaries for compensation but hold everyone accountable to be able to EARN a honest days pay for an honest days work!
And if they can not perform, then they should be terminated. That is how it is done in the real world.

As a taxpayer, I will never agree to have the Postal Service bailed out by and governmental agency.

They post office should be run like a real business in the real world.

Get a clue!

I don't think the post office should be left to fail, even though email and couriers have bitten off a huge part of their necessity, but cutbacks are not always a bad thing. Do we really need Saturday mail delivery?

If we lose Saturday deliveries, will our credit card companies agree to alter their dates to accommodate the loss of one more mailing day?

yes we do Beatrice!

I know Canada doesn't have Saturday deliver and somehow they get on without it!

I think it comes back in ways to delivering good service within the confines of what we have.

Now that is the Bottom Priority of the post office, if it is even on the list…

I find the service provided by USPS to be outstanding. My packages always get delivered and if I want it I can get them delivered overnight. My least favorite way to ship is by the almighty UPS. On more than one occasion sensitive articles have been left out in the elements and on one recent overnight shipment the item did not arrive until 4 days after the fact. And to make matters worse UPS did not stand behind their overnight shipment promise. I find all of the competitors of USPS to be higher for the same service and not any better at getting the job done. I would like to see the USPS continue with the same distribution centers and delivery schedules. Raise the price of a stamp to 55 cents and it will still be way less expensive than the other options before us. Those who like to complain about the USPS should stop and consider what else they can get for 44 cents today and even for 55 cents if they raise the price of a stamp to levels adequate to cover costs this year and the next.

When it was first introduced budget scoring made a good deal of sense but it has become a highly politicized process that relies on oft times dubious assumptions.
The Postal Service, being an off-budget entity is hamstrung by the vudget scoring process. PMG Donahoe has suggested that a solution might be to take Postal trust accounts for retrements and retiree benefits off-line but that could have seriously dangerous consequences and would essentially be a step towards privatization. Better would be a means of segregating Postal accounts in internal Treasury accounts and taking those account off-budget.
The argument against that would likely be the creation of a slippery slope where more and more things are proposed for off-budget status. It isn't realistic to think Congress is capable of making changes based purely on efficacy rather than ideology but still, there ought to be a way to treat Postal accounts in a way that recognizes the unique status of the Postal Service.
Alternatively, it may be time to address whether the Postal Service can best perform its role as infrastructure given its current management structure. It may be time to look at sructures that bring the Postal Service back under the aegis of a cabinet department, perhaps Homeland Security or Commerce. Such a move would certainly hold promise for better integration of the postal network with other government functions and may allow for synergies that better utilize the network.
The idea of the Postal Service as a quasi-corporate entity is simply incongruous with its role as infrastructure and with the values embodied in the universal service mandate. The current structure strains against the bounds of mission and definition which is a large part of why we are in the prdeicament we are in today.

Thank you for your thoughtful comment. The budget scoring process does create complications for the Postal Service that seem unnecessary as long as the Postal Service supports itself. The OIG has also suggested that moving the Postal Service's retirement and pension accounts off budget is one option to prevent any scoring problems in adjusting contributions as needed.

In response to your last paragraph, Pushing the Envelope is having a week-long discussion starting today on whether the Postal Service is an infrastructure or a business. Check it out.

I've tried to print postage labels for Priority Mail, but it never works. Complaining hasn't helped. No wonder the Post Office is losing money!

Have you tried the Postal Service's Click-n-Ship help? Try the Click-n-Ship help tab at this link:
https://www.usps.com/customer-service/customer-service.htm

Also USPS has a custom service for the labels. Just call a local store and ask them.

It seems your rates have gone UP and definitely the SERVICE went "DOWN". The location I am have an issue with is the Washington,DC area code 20002 - I pay the price for PRIORITY MAIL w/CONFIRMATION and delivery seems to be going by Camel!! I do realize your Metro area is large but at the same time I am paying the Price for timely delivery???

I agree wholeheartedly with marylou on the 20002 zipcode having inexcusable poor service. I send my packages EXPRESS mail with supposedly guaranteed delivery and they still cannot seem to get there on time. I have filed complaints and it apparently does not matter. I really am a huge supporter of the Post Office especially in small rural communities like ours as they do outstanding work but perhaps the Postal Service should concentrate on the areas with the most measurable complaints, refunds due to not making guarantees, and lost/destroyed mail statistics and contract those services out to companies that consistently show good customer service.

Now that is the Bottom Priority of the post office, if it is even on the list…

Linden Method Review . Here in the UK the Postal Service is all facing financial challenges. It is State Owned and needs money to invest in technology. The Government has little cash to spare so the service can only propose massive price increases and a reduction in the universal coverage promise. Not sure if there is a clear answer as the use of social media reduces postal volumes and internet retailers use carriers for all but the smallest items.

Have a Federal Lottery, with tax-free prizes, to save postal delivery services, and market it that way. Help us deliver for you. Tickets could be added on to machine or window sales, say for a dollar each, with a million dollar prize. The dollars will come pouring in.

Why does the US Mail have so much rolling stock ie: Tractors,Trucks, Trailers, etc. ? Main yard Oakland CA you have trailers that haven't been use snce the DOT COM BOOM. That's more that 10 years ago. Why don't you sell the old stuff??

Steve

Why is it I cannot get a straight answer about the cost of sending a postcard? Ever since the price hike I have been told .30 cents to .32 cents to mail a postcard. The post office here does not sell .30 cent stamps so I am paying $4. more for a roll of 100! Why is that?

The postage to mail a card is 32 cents. If you want to buy the card with the postage affixed it is 34 cents. Please go to usps.com to enter a complaint if you are being charged the wrong amount.

post should really be given priority

On more than one occasion sensitive articles have been left out in the elements and on one recent overnight shipment the item did not arrive until 4 days after the fact. And to make matters worse UPS did not stand behind their overnight shipment promise.

This is a recession. Everyone has to cut corners.
Seems to me everyone thinks they are invaluable and should not be subject to budget cuts.

It dosent work like that. USPS needs to be run by the government like an actual business.

Every day business deal with the loss of customers or some product does not sell well....and guess what they adapt and restructure, and thats what USPS needs to do and the unions should not interfere.

Hopefully, with the creation of the Veteran’s Job Corps, the status of veteran’s employment in the U.S. will improve; however, since any form of social progress tends to move slowly, high percentages of service men and women will continue to be unemployed and not receiving adequate transitional assistance into civilian life.

US postal tracking is horrible, even Russia is faster and better. Track only Express or Global mail and Registered mail, and do it right. Skip the others, because USPS is not up to the job.

will improve; however, since any form of social progress tends to move slowly, high percentages of service men and women will continue to be unemployed and not receiving adequate transitional assistance into civilian life.

On more than one occasion sensitive articles have been left out in the elements and on one recent overnight shipment the item did not arrive until 4 days after the fact. And to make matters worse UPS did not stand behind their overnight shipment promise.

Hopefully, with the creation of the Veteran’s Job Corps, the status of veteran’s employment in the U.S. will improve; however, since any form of social progress tends to move slowly, high percentages of service men and women will continue to be unemployed and not receiving adequate transitional assistance into civilian life.

Everything should be under control, to be cut the cost. So the post should be too.

Maintain and improve the quality of public postal services at all service points such as: universal postal service, postal services as required by the State to serve the economic and social developmentdevelopment and ensure national defense and security, postal and emergency services for prevention of natural disasters, epidemics ... services issuance of notice in accordance with ....
Improving the quality of transport networks: service providers locate, post sent lookup, reduce time taken
I think that !

finance is always a problem giving us a headache,

Hopefully, with the creation of the Veteran’s Job Corps, the status of veteran’s employment in the U.S. will improve; however, since any form of social progress tends to move slowly, high percentages of service men and women will continue to be unemployed and not receiving adequate transitional assistance into civilian life.

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