Showing posts with label #GovernmentBudget. Show all posts
Showing posts with label #GovernmentBudget. Show all posts

Monday, August 14, 2023

From Franklin to DeJoy: Navigating the Future of the USPS and the Potential of Postal Banking.

1st United States Postmaster General.

Today's post concerns The Economist's recent article on the United States Postal Service (USPS). The article begins with a wry allusion to Benjamin Franklin's role in starting the post office, but moves quickly to an evaluation of Louis DeJoy, the 75th Postmaster General. He has embarked on significant reforms for the financially troubled USPS. Upon taking office during a politically fraught period, he was faced with an institution projected to lose $160 billion by 2030, a problem exacerbated by declining first-class mail and burdensome regulations. DeJoy's efforts have resulted in efficiency improvements and bipartisan postal-reform legislation, though controversial measures such as consolidation and price increases lie ahead in his “Delivering for America” plan, while making sure we protect the letter carriers the United States had depended on since before the Revolution. 

The article alludes to one notable potential reform for the USPS, the introduction of postal banking. This concept has proven successful in places like Japan, where post offices offer routine check clearing and banking services. The existing infrastructure of the USPS provides an opportunity to extend essential banking functions to underserved communities, without the volatility often associated with the traditional banking industry. By offering a stable and accessible alternative, postal banking could present significant benefits to the American public.

Wednesday, May 24, 2023

Minor Trims on Major Issues: The Triviality of Current U.S. Debt Ceiling Negotiations.

Sunset, Yosemite Valley.
© 2013 Dliff.
In an article today in the New York Times, Jim Tankersley discusses the ongoing negotiations between President Biden and House Republicans concerning the U.S. debt ceiling. The primary focus of these talks has been to curtail nondefense discretionary spending, which encompasses areas such as education, environmental protection, and national parks. However, this sector represents less than 15% of the government's anticipated spending of $6.3 trillion for the year. Meanwhile, the negotiations have precluded any substantial changes to Social Security and Medicare, which account for the majority of future projected spending growth, and military spending, which rivals nondefense discretionary expenditure in size.

The proposed budget cuts chiefly target areas that are not primary sources of spending growth in the upcoming years, such as education and environmental protection. The reductions could lead to a 30% decrease in many popular government programs, according to White House officials and independent analysts. Additionally, the negotiations are unfolding in the wake of a substantial spike in federal spending during the Covid-19 pandemic under both President Trump and President Biden's administrations. Despite this increase, the Congressional Budget Office expects a modest drop in total government spending for this fiscal year, followed by a rise later in the decade.

The projected increase in federal spending over the coming decades is attributed primarily to major federal health programs and Social Security. These trends were apparent even before President Biden took office. The current negotiations, with their focus on trimming relatively small parts of the budget, have been criticized from both ends of the political spectrum. The stalemate over addressing mandatory spending programs and the nation's tax system continues with no immediate solution in sight. The trajectory suggests that an agreement capable of significantly altering federal spending in the future is unlikely under the current approach.