Very disturbing news coming out in recent days that the venerable US Postal Service (USPS) which has been on shaky financial legs since a 2006 law passed by a Republican congress and signed into law by George W. Bush forced the USPS to pre-fund 80% of retirees health care benefits 75 years in the future. Before that the USPS was a profitable quasi-corporation.
“Today, the Postal Service is just as essential: It delivers about 1 million lifesaving medications each year and serves as the only delivery link to Americans living in rural areas. Working with other delivery services like UPS, the agency supports $1.7 trillion in sales and 7.3 million private sector workers year, and this year will prove essential to delivering the 2020 Census to citizens as well as any vote-by-mail initiatives. The USPS is the federal government’s most favorably viewed agency, with an approval rating of 90%.
Yet once again, the USPS is in crisis mode.
With a negative net worth of $65 billion and an additional $140 billion in unfunded liabilities, the USPS originally expected to run out of liquidity by 2021 without intervention. That has accelerated rapidly because of COVID-19. Fewer people and businesses are sending mail because of the outbreak, which could hasten the decline of the Postal Service and close its doors as early as June, officials warned. “
An article from the Philadelphia Tribune back in 2011 gives a fairly good explanation of what that bill did to the post office:
“The operational efficiencies — as the Postal Service refers to them — are aimed at reducing costs by $20 billion by 2015 in order to return the agency to profitability, according to David Williams, vice president of USPS Network Operations. That would be a noble accomplishment, except for the fact that — on paper at least — the USPS already turns a profit every year. But a mandate contained in the Postal Service Accountability and Enhancement Act — a 2006 reform bill that was signed by President George W. Bush — created a highly unusual burden on the agency that within a single year helped turn it from an operation that pulled in $1.4 billion in profits in 2005 to one that now bleeds cash like a sieve.
Embedded in the law is a requirement that the Postal Service put 80 percent of its retiree health benefits for the next 75 years into a newly created Postal Service Retiree Health Benefits Fund. The payments are to be made at a highly accelerated rate that amounts to a total cost to the USPS of more than $5 billion each year through 2016. According to Fredric Rolando, president of the National Association of Letter Carriers, the Postal Service is essentially being asked to pay the future health benefits of employees that don’t even work for it yet.
By contrast, most private sector companies pre-fund just 30 percent of future retiree health care costs, if they do so at all, and no government agency is required to pony up as much as the USPS for future benefits.
“Nobody else is required to do this. No government agency, no private company, nobody. And that’s what’s pushing the Postal Service towards the edge of bankruptcy,” said Sally Davidow, a spokesperson for the American Postal Workers Union, which represents more than 360,000 postal workers.
According to Davidow, the pre-funding caveat was inserted by the Bush administration at the last minute into what had been a widely popular reform bill, though she points out that the APWU opposed it from the start.”
Now the gut punch of the pandemic has decreased USPS volume dramatically and therefore their revenue has taken a big hit.
In order to understand why a Republican administration would slip such an amendment into a piece of legislation one must ask what the the Republicans would get from it. Setting the USPS up to fail would fulfill two long held dreams of the Republican Party. First it would privatize what once was a governmental agency and is still a quasi-governmental unit that is a for profit entity that has rules made for it by congress. Were the USPS to go out of business or be substantially reduced, private businesses would expect to inherit the USPS volume.
The second reason is that if the business that has one of the few strong unions left in existence goes out of business then logically so would the unions. Killing unions is a favorite Republican sport.
So now we are in a crisis where currently the very best thing we can all do to keep ourselves healthy and alive is to keep our distances from other people. That would include not doing such things as standing in voting lines. In recent years in Republican states one of the strategies Republican officials have used to discourage “certain” voters is to limit the number of voting places in specific areas. The lines at these polling places would be long and probably closely packed. Not a place that people would want to be in this Covid-19 era.
Thus the logical alternative would be vote by mail such as been used quite successfully by states like Oregon, Washington and Colorado. Democrats have been pushing to make such a thing happen because of the benefit of helping to curb Covid-19.
But what if the USPS would go under. The USPS delvers mail across the country for $.50. None of the private companies do anything like that. The fee would be drastically higher, no doubt. In addition the private companies do not have the equipment or personnel to handle such a huge influx of business. Nor do they or have they ever taken mail to all the remote places that people live in this country. That has always fallen back on the USPS to make those deliveries.
Congress must save the USPS for many reasons. Easily the most important is that the USPS may be the key factor in saving the American democracy. Here is a link to a petition to sign demanding to keep the Post Office open.