Learn from Postal Service

Aproposal to close 51 post offices in South Carolina and institute the fourth increase in first-class postage in less than two and a half years has provoked predictable howls from the public. The measures are part of a nationwide belt-tightening for the Postal Service aimed at averting an impending fiscal crisis. Though painful, they probably won't be sufficient.

Losing any of the eight Charleston area branches, one being the historic Old Main Office on Broad Street, would inconvenience customers who use them. But Congress has instructed the Postal Service to undertake efficiencies, and downsizing is part of that process — particularly with a $6.5 billion deficit this year.

In a larger sense, the crisis is a lesson in the perils of public ownership.

The Postal Service is laying off 25,000 employees, asking Congress for permission to reduce delivery days from six to five a week and offering early retirement.

It also wants to tap its Retiree Health Benefits Fund, which is managed by the U.S. Treasury Department, to cover projected losses for the next seven years. Its unions are screaming.

The crisis stems in part from the continuing transformation of the communications marketplace. But it also is the bitter result of costly congressional mandates, union power, unaffordable employee benefits and rising health-care costs. Similar burdens bankrupted Chrysler and General Motors. But as the Postal Service's decades of travail show that having the government as partner and overseer is not necessarily a solution.

There is a lesson here for the growing list of companies partly owned by the government, or tied to favorable government financing. When the government calls the shots, efficiency, profitability and calculations of risk take second place to other goals.

Congress wants the profitable services of the Post Office to pay for its mandates. They can't, and this parsimony leads to crises.

The underlying problem is the overwhelming cost of the social-welfare benefits Congress has enacted over the past 70 years, along with employee benefits that unions have imposed on corporations and want the government to assume when the corporations fail.

Because Congress has resorted to borrowing to finance these benefits, a growing part of the national budget goes for interest payments. That leaves less to pay for needed public services, like rural mail delivery. And that leaves less to maintain the post offices now functioning across the country.

The result: Our society, led by Congress, is indirectly paying more and more for social policies it will not pay for up front. It is sacrificing the future to the past.

The continuing tendency of Congress to borrow and spend makes it a very dangerous partner for all companies that are partly owned by the public.