'Why Wouldn't They Want You To Make Money?': Rick Scott Asks Postmaster General About USPS Regulator

[0:00] Thank you. [0:01] You bet. [0:03] Senator Scott. [0:04] Thank you. [0:05] Thanks for being here. [0:06] All right. [0:07] So I don't understand how business loses money. [0:10] It just doesn't make any sense to me. [0:12] So if you if you couldn't get any more money out of the [0:15] government. [0:16] All right. [0:17] And they and we didn't let you borrow more money because if [0:20] you borrow more money. [0:21] Ultimately, you know what that's going to happen. [0:23] Post office. [0:24] I've been up here seven years. [0:25] It never makes money. [0:26] So it's they'll come ask for a bailout. [0:28] Right. [0:29] So. [0:30] So we're not fixing anything. [0:32] Nothing's getting. [0:33] There's no real solution here. [0:34] So if you could if there were no limitations on what you [0:38] could do, what would you do? [0:41] So you may have seen the press reports. [0:44] We actually brought in the preeminent restructuring firm in [0:49] the in the world to look and tell us exactly that. [0:53] You know, let's assume that we aren't going to get any help. [0:56] What are we going to do? [0:58] You know, they're in the process of putting that report [1:01] together. [1:02] I would tell you that there is absolutely no doubt that that [1:08] would lead to a stream down postal service. [1:13] It would lead to delays in service. [1:16] I mean, there's look the as as as the chairman very appropriately [1:21] pointed out 80% of our costs are labor costs. [1:25] There's only one way you can become profitable here and that's [1:28] address the labor costs. [1:29] And so we would have to go in and look at how we can change days [1:34] of service, you know, reduce the level of services, and we would [1:39] have to shut down a massive number of post offices. [1:42] So all right, so let's take I looked on a report I've got that [1:49] you're if you look at the number of pieces on on marketing mail [1:53] versus the revenue is dramatically less per piece than first class. [1:58] So why is that? I don't first off, I'm sure we all love all the [2:02] marketing mail we get because I have I have to get an extra recycling bin [2:06] for it. [2:07] My old business. We loved that, by the way. [2:10] Yeah, that's probably good for you. [2:12] You just recycle it. People don't look at it. [2:16] But, you know, it is the antiquated pricing structure that is imposed [2:22] upon us by the PRC. [2:24] And so, you know, to the chairman, who's the PRC? [2:27] Why do we? [2:28] Postal Regulatory Commission. [2:29] Why do what? So who's that? [2:30] They were set up in 19 in the when the Postal Service was split so [2:36] that they could oversee this, quote unquote, monopoly. [2:39] Now, you know, in 1971, arguably we were a monopoly. [2:43] There is zero chance that we are a monopoly at this point in time. [2:47] And so I completely agree with the chairman. [2:49] It seems to me that we have a regulatory body that is regulating in a past era. [2:56] So why would they want you to make money? [2:58] Well, they've got what I've understood from them. [3:03] And I won't profess to speak for them. [3:05] They say they have to balance a number of things. [3:09] But here's the market email. [3:12] Right. So here's the balance that they did last. [3:15] They they told us we can only raise prices once a year. [3:19] And they acknowledged that that could be $700 million to the Postal Service. [3:25] That could cost us $700 million. [3:28] In their opinion, they said, but that doesn't make a big dent in their total loss. [3:34] So we're going to do it. [3:37] Who does that benefit? [3:38] It benefits the marketing mailers, right? [3:40] That's $700 million that got transferred from us directly to our customers. [3:44] No, no, it got transferred to the taxpayers of the country. [3:47] That's who got transferred to. [3:49] The taxpayers paid for, right? [3:51] Because we're going to have to cover. [3:53] We're going to have to cover your losses. [3:54] That's absolutely correct. [3:56] And so so I think I think your point is absolutely correct. [4:00] You know, a normal business takes price and volume and finds the best mix. [4:06] Why are they in existence? [4:07] Why do you need them? [4:08] Because we don't need them, but they are in existence. [4:11] You know, ostensibly again, I won't speak for them, but ostensibly because we are a monopoly. [4:16] And they have to regulate the monopoly. [4:19] How many how many how many marketing contracts have you lost at FedEx and UPS for just for marketing mail? [4:27] Oh, no, marketing mail. [4:28] We we are the only ones that deliver marketing mail. [4:30] We do have a monopoly on the mailbox. [4:32] No, you can't charge whatever price. [4:34] No. [4:36] And you have to charge less than first class. [4:39] Absolutely. [4:40] So a letter I want to send to my grandkid. [4:42] OK, cost me more than the marketing stuff. [4:44] I don't want to read. [4:45] Absolutely. [4:46] And Senator, you would not believe how arcane and complicated those pricing rules are because [4:52] there's so many different classes and so many different discounts. [4:55] You know, you definitely need a you definitely need advanced degree to understand them. [5:00] And I don't. [5:01] And you acknowledge if you go borrow money, ultimately, all you're saying is if we go borrow [5:05] money, you're going to come back later and ask for the taxpayer to pay for it. [5:08] Right. [5:09] Well, no, you know, I truly believe. [5:11] And this is, you know, in defense of the mailing industry. [5:15] I truly believe that if we if we become an economic engine rather than just thinking of us in terms of delivery and we help grow that industry, it is a two trillion dollar industry. [5:30] And actually the marketing that they do is very effective. [5:35] We can make it more effective if we can manage the price. [5:39] They should pay for it. [5:40] If they're going to make money off of it, they should pay for it. [5:43] And and I would hope they do pay for it through paying taxes. [5:46] And and no, look and look, I completely agree on the price piece, too. [5:52] We have to match price and volume. [5:54] That's best for us. [5:56] But I truly do believe that this two trillion dollar ecosystem, we have a choice to either shrink it or grow it. [6:03] It's been shrinking for the last 15 years. [6:05] If it continues to shrink, shrink net dollars into the Treasury get reduced. [6:10] I think it's a I think it's a discussion worth having. [6:14] And and look, you all get to make those policy decisions. [6:17] I'll do it either way. [6:18] But I do think it's a discussion worth having. [6:21] All right. [6:22] Thank you. [6:23] So Rick, I think you.