Postal-reform legislation hailed as a much-needed repair to the ailing USPS

The postal-reform legislation that passed overwhelmingly in the House on Tuesday has been hailed as a much-needed repair to the ailing United States Postal Service. Unfortunately it doesn’t fix the postal service’s biggest problem. In the face of falling mail volumes and massive liabilities, the USPS has claimed for years that greater pricing flexibility would solve its financial woes. Free of existing regulation, its managers argued, the USPS could respond quickly to market opportunities and thereby increase earnings. It looks like the USPS is finally getting what it wanted: At the core of the new bill are measures that free up the pricing system. To really mend itself, however, the postal service needs not so much flexibility on pricing as the flexibility to cut its massive labor costs. And the new legislation doesn’t give it that.