Postal Service again suffers from its half caff governmental status
The United States Post Service is once again in the cross-hairs of the government that most of us persist in thinking it is a part of. It is. And it isn't. It depends on who you ask. And why you're asking.
The Postal Service suffers intermittently at the hands of elected officials that don't seem to want to ever understand or acknowledge that mail delivery is a government service. Unlike other government agencies, the VA, Health and Human Services, Transportation, the USPS is required to be profitable. It's a "quasi-governmental" agency. Like half-caff coffee, it's not quite up to being stimulating but it still will keep you up at night. Quasi-governmental equates the status of the USPS to a factory floor temp - all the work of permanent employees, but few of the benefits.
In 2009, the Post Office Inspector General wrote:" The budget status of the U.S. Postal Service has been a matter of both contention and confusion since the 1970 Postal Reorganization Act (PRA) put the Postal Service on a self-sustaining basis, exempting it from general budget and funding laws and denying the executive branch control over its finances. In the 1970s and 1980s, the Postal Service was sometimes included and sometimes excluded from the president's budget by administrative decision often hinging on whether it was running a surplus or a deficit. When it was on budget, the Postal Service was commonly caught up in deficit reduction squabbles, and took on obligations belonging to the Treasury..." Federal Budget Treatment of the Post Office
The Postal Service, that "quasi-governmental agency" is included in the unified budget scoring. If the Post Office gets some funds, it's expected to offset the funding with cost savings. That means cutting services and access. It is expected to pay its own way.
The 1989 federal deal that made the agency semi independent was a devil's bargain for the Service. Big thinkers who have long despised the status of the everybody gets served philosophy came up with a new idea to help the mail delivery service fail. Require putting aside significant sums of postal income into a rainy day fund bigger than any required of any other agency.
The retirement benefits passed in 2006 during the Bush Administration required prefunding of between 50-75 years ahead for postal employees. There is some argument on the length of the prefunding requirement but whether it's fifty years into the future or seventy five, no other company does that. It presupposes that employees with stay a postal employee their whole career and live long enough to collect. It also supposes that the agency will continue to have an income large enough to meet all its obligations. None of those have turned out to be true.
The upshot has been an agency constantly fighting a rear guard action to keep the bean counters from closing it down. Staying solvent has come to mean closing post offices in rural areas, (see our article about the fight to keep the Columbus KY post office open) cutting delivery back and hiring temp employees as rural mail carriers, and entering into contracts with big sellers, Amazon, to deliver their mail at a reduced cost. Those efforts haven't made the USPS profitable.
Those who depend on mail delivery have to wonder why anyone ever thought mail delivery should be singled out as the one government agency that touches every one, rich and poor alike, to be profitable.
The Postal Service is now facing a crisis because of the pandemic (who isn't?). Mail delivery is down. Fewer trips to the post office. Fewer packages shipped. Business and legal mail has shifted to email and online.
The next small business relief act - round 3?- is under threat of a presidential veto if the Post Office is included. The Washington Post reported that "Trump threatened to veto the $2 trillion Corona virus Aid, Relief, and Economic Security Act, or Cares Act, if the legislation contained any money directed to bail out the postal agency, according to a senior Trump administration official and a congressional official who, like others in this report, spoke on the condition of anonymity..."
There is a theory that President Trump thinks that the Post Office helps Amazon, the creation of his nemesis Jeff Bezos. The President may believe that privatization is the way he wants to see the service go. He has repeated the incorrect statement that private delivery is cheaper than using the postal service. Anyone who has used FedEx or UPS could set him immediately straight on that.
The United States Postal Service is a necessary lifeline that should be bailed out. The American taxpayer will bail out private businesses again as we did in 2008 when self inflicted wounds caused an economic meltdown. Those bailed out then and many bailed out now give a lot less back to their communities than does the Postal Service. Postmaster General Megan J. Brennan said in a statement which says in part "As Congress and the Administration take steps to support businesses and industries around the country, it is imperative that they also take action to shore up the finances of the Postal Service, and enable us to continue to fulfill our indispensable role during the pandemic, and to play an effective role in the nation's economic recovery.
We are grateful for the heroism and commitment of our 630,000 postal employees who continue to serve the American public during this pandemic..."
For the full statement, go to US Postmaster General Statement on stimulus
If you agree that the Postal Service should get federal help during this unprecedented time, contact Congress and tell them that. How to Contact Your Elected Officials