Should Congress Repeal the Private Express Statutes?

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In July 2009, the Government Accountability Office (GAO) listed the budget of the United States Postal Service as “high risk” and recommended oversight from Congress and the Executive Branch. Specifically, the GAO stated that “Amid challenging economic conditions and a changing business environment, USPS is facing a deteriorating financial situation in which it does not expect to cover its expenses and financial obligations in fiscal years 2009 and 2010” (“Restructuring”, 2009, pg. 1). The GAO claimed that the mail volume in 2009 would likely decrease by about 28 billion as compared to 2008 and that the USPS would likely see declining volumes for the next five years (“Restructuring”, 2009, pg. 1). Clearly, the USPS is currently facing a dire financial situation in which major reforms are needed to ensure the long term success of the agency. In this policy review, I will focus specific attention on the Private Express Statutes, which grant the Postal Service a monopoly on first class mail. As I will argue here, the Private Express Statutes should be repealed on economic and historical grounds. The Private Express Statutes should be repealed on economic grounds. In particular, the economic reasons given for maintaining a monopoly on first class mail rest on two principles. First, that the Postal Service must maintain a monopoly in order to fulfill the universal service obligation under which it is legally obligated, and second that the market for mail is a natural monopoly and thus the USPS must be allowed to operate as a monopoly in order to achieve economies of scale. I will examine both of these arguments in an economic light to determine their validity. The postal service does not rely on a monopoly to provide univer... ... middle of paper ... ...onLit. Cohen, R. H. (2003, February 20). Testimony before the President's Commission on the Postal Service. Retrieved January 15, 2010, from http://www.treas.gov/offices/domestic-finance/usps/testimony-docs/Cohen.pdf Geddes, R. (2003). The structure and effect of international postal reform. Retrieved January 23, 2010, from http://www.aei.org/paper/17066 Geddes, R. (2005). Policy watch reform of the U.S. Postal Service [Electronic version]. Journal of Economic Perspectives, 19(3), 217-232. Restructuring the U.S. Postal Service to achieve sustainable financial viability. (2009, July). Retrieved January 17, 2010, from http://www.gao.gov/new.items/d09937sp.pdf Priest, G. L. (1975). The history of the postal monopoly in the United States. Journal of Law and Economics, 18(1), 33-80. Retrieved January 18, 2010, from JStor.

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