USPS bailout on the table

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A budget expert at a prominent Washington think tank says instead of bailing out the U.S. Postal Service with taxpayer dollars, Congress should remove the government's monopoly on first- and third-class mail.

The U.S. Postal Service is estimating that it will lose almost $8 billion in the coming year and deliver 11 billion fewer pieces of mail. That follows the announcement last week that the federal agency had lost $3.8 billion in the most recent fiscal year and delivered 26 billion fewer pieces of mail.

A Postal Service spokesman tells CBS News that the agency currently owes the U.S. Treasury $10.2 billion. Now comes word that Congressman Danny Davis (D-Illinios) is calling for a federal bailout of the Postal Service and elimination of Saturday service.

Tad DeHaven, a budget analyst at the Cato Institute, says Davis' comments reflect a mentality in Washington that prefers taking other people's money and throwing it at a problem rather than finding practical solutions.

"You can get rid of Saturday service, or they've talked about removing a day from the week. You can give the Postal Service more money through general funds, but that's not going to fix the underlying problems at the Postal Service," the budget analyst notes. "With technology changing, people use e-mail; they use text messages [and] cell phones. That's completely undermined the demand for the Postal Service's business."

DeHaven predicts that because it is burdened by excessive labor costs through a largely unionized work force, and because the current Congress has no interest in undermining union power, the Postal Service will continue to "plod along and lose money."