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The United States Postal Service has been in financial trouble for years. The added pressure brought on by the coronavirus pandemic has brought it to the brink of collapse.
Mail volume has dropped dramatically because of the outbreak, robbing the USPS of its most profitable revenue stream. The agency expects to run out of money by September and have a net operating loss of $54 billion in the near future. Without significant help, “the Postal Service could cease to exist,” the chairwoman of the House Oversight Committee said.
The USPS has been a fixture of American life since 1775. For most of its history, it operated as a typical government service. That changed in 1970, when it was turned into an independent agency that was expected to run like a business without financial support from taxpayers. That arrangement was largely successful until the mid-2000s, when a combination of new laws that restricted its income and the emergence of digital alternatives crippled its budget.
The Postal Service frequently ranks as Americans’ favorite federal agency, with approval ratings as high as 90 percent. But it has recently drawn the ire of President Trump, who incorrectly blames its financial troubles on low prices it charges Amazon for package delivery services. “The Postal Service is a joke,” Trump said last month.
Why there’s debate
Political divisions have also informed proposed solutions for rescuing the Postal Service. According to USPS leaders and many liberal lawmakers, the best solution is a massive infusion of cash. Democrats have pushed to include billions in additional funding for the agency in the trillion-dollar stimulus packages recently passed by Congress, but Trump reportedly threatened to veto any bill that included a bailout for the USPS.
Beyond funds to survive the current crisis, the USPS needs fundamental changes to free it from the circumstances that were tanking its finances long before the pandemic came along, some argue. The agency’s current structure — in which it has all of the revenue-generating responsibilities of a private business but still has its policies dictated by Congress — is seen as unsustainable by many. In 2006, a Republican-led Congress passed a law requiring the Postal Service to put away enough funds to cover retirement and pension costs for its employees for the next 75 years. Without that law, which some argue was part of a deliberate attempt to bankrupt the agency, the Postal Service would have actually made a profit in recent years, according to analysts.
Others have argued for either expanding the service’s mission to include new revenue-generating operations like banking, or cutting back expenses like ending Saturday delivery.
Some conservatives argue that the best path for the Postal Service is for it to no longer be part of the government at all, but instead become a private company free from congressional restraints.
The Trump administration announced Wednesday that the current head of the USPS will be replaced by a top Republican donor in June, which could be a precursor to the service implementing some of the changes in package fees the president has demanded. Funding for the Postal Service may be a key point of contention during debate over the next congressional stimulus bill. Democrats are expected to push for $25 billion to keep the USPS afloat. But that provision may need enough Republican support to override a potential veto from Trump.
Congress needs to stand up to Trump to pass a USPS bailout
“Trump has now threatened to veto any stimulus package that includes funding to shore up the agency. Congress should call his bluff, and do what it takes to save the US Postal Service or make the president pay the political consequences of signing its death warrant.” — Editorial, Boston Globe
Restrictive laws that choke the Postal Service’s budget need to be revoked
“Congress has hamstrung the agency with an unsound plan to fund future retiree pensions. It also has prevented it from employing modern technologies or adding services that might compete with private companies. It should unleash the agency.” — Editorial, Los Angeles Times
Saturday delivery should be cut to save money
“The postal service should be free to choose to stop delivering paper mail six days a week — once all the stimulus checks are in the public’s hands. Again, demand for paper mail has plunged, and it is financially irresponsible to force mail carriers to haul mostly low-margin advertising mail more than five days per week.” — Kevin Kosar, Politico
The USPS should be privatized
“Policymakers should restructure the USPS with two goals in mind: creating a level playing field for all businesses in delivery markets and giving the USPS the flexibility it needs to cut costs and diversify its revenue sources. … To survive and even thrive in the changing economy, the U.S. Postal Service should be moved to the private sector.” — Chris Edwards, New York Daily News
Congress should start treating the USPS as a public good, not a business
“From the 1850s until the 1960s, Congress routinely covered whatever deficits the Postal Service incurred — no matter how large — and with little controversy, partisanship or debate. Why? Because the Postal Service was a public service, whose rationale was civic rather than commercial. … The Founders intended the Postal Service to be a pillar of the republic, binding together millions of Americans, urban and rural, for the common good.” — Richard R. John, Washington Post
Any bailout should be contingent on major reforms
“If the USPS wants to receive taxpayer aid during this crisis, it should make the institutional reforms that it has neglected for decades. Indeed, neglecting to solve these issues for so long has now made it all the more difficult for the institution to cope with the new extreme and difficult circumstances.” — Thomas Aiello, Washington Examiner
Bail out the USPS now, fix its long-term problems later
“President Trump is absolutely correct that the U.S. Postal Service needs restructuring and a viable business model. … But now is not the time to play hardball with an agency as central to what ‘makes America great.’” — Kimberly Wehle, The Hill
The USPS should be freed to explore new ways of making money
“The service should get more control over how much it charges for its services, how many people it employs and how easily it can innovate. Many post offices may have to be closed, but others could be reconfigured to also provide banking and licensing services if and when the world normalizes.” — Timothy L. O'Brien, Bloomberg
The USPS needs to be protected from GOP sabotage
“The truth is, the Postal Service has been under attack by conservatives for years. … The Trump administration is now playing a costly game of chicken to get what it sought long before the current crisis: drastic service and facilities cuts, more noncareer labor and outsourcing, and a rollback of employee rights and benefits. If it succeeds, we’ll all be the poorer for it.” — Philip F. Rubio, Atlantic
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