Save the USPS

by Rich Dunn, NVRDC 2nd Vice Chair 

The US Postal Service ended 2013 with a $354 million deficit, the 18th loss out of the last 21 quarters. This is entirely due to provisions in the Postal Accountability and Enhancement Act of 2006, enacted when Republicans controlled both houses of congress and the White House. This draconian law forces the USPS to pre-pay the next 75 years’ worth of retiree healthcare costs within a 10-year window.

Republicans know that no business can operate that way, but the intent of the law was not to “enhance” the Postal Service as the name suggests. The real purpose was to force it into bankruptcy so it could be privatized, as has already happened in a number of other countries. According to the radical ideology driving these policies, competiton will lead to lower prices and better service, but things haven’t been working out that way.

In parts of the EU where postal systems have been privatized, large corporations have come out the big winners while citizens and postal workers have come out the losers. The typical pattern is for post offices to close and be replaced by counters inside of private businesses. Mail is only delivered only two or three days a week in cities, not at all in rural areas.

For postal workers, privatization has led to lower wages and more part-time and contract jobs with little job security and few or no benefits. Meanwhile, corporate customers are getting their mail picked up more frequently, often at lower cost thanks to reduced labor costs and service cutbacks to the general public.

Of course, major shareholders and C-Suite executives of postal businesses can’t believe their luck.  Even as letter mail has seen declining volumes, there are still enormous profits to be made in the mail industry thanks to the shift from brick and mortar retail stores to online shopping.

In the United States, the privatization and downsizing process has actually been going on for some time. Since the Postal Reorganization Act of 1970 went into effect, the Postal Service has paid its own way and has not received one cent in taxpayer subsidies. Now more than $12 billion of the USPS’s $65 billion annual budget goes to private companies like Pitney Bowes and United Parcel Service.

Part-time workers now make up over 20 percent of the workforce and the total number of USPS employees has been reduced by a third. Meanwhile over half of the processing plants have been closed and hours at many rural post offices have been drastically reduced, sometimes to just two or three hours a day. Collection boxes have been removed from the streets, the speed and reliability of mail delivery has gone down, more customers are being forced to pick up their mail at cluster boxes and lines at post offices are longer than ever.

In the fourth quarter of 2013, the US Postal Service made an operating profit of $765 million, a very healthy margin for any business that size. But thanks to the congressionally-imposed burden of paying its pension obligations forward, something no private business has ever been required to do, the Postal Service has to take $5 billion a year off its bottom line, resulting in paper losses quarter after quarter while it funds a $50 billion escrow account. This is 100% of the reason why the Postal Service continues to show a paper loss.

Fortunately there is hope on the horizon. On February 6th the Senate Homeland Security and Government Affairs Committee approved a bi-partisan bill which would give the Postal Service more operating flexibility and lighten some of its workforce-related burdens. Not only would this bill put the Postal Service’s balance sheet on a more businesslike footing, it would also allow it to innovate in ways that would maximize its revenues while enhancing its range of services, such as selling advertising space on the 22 million stamps it sells every year or offering email, web, banking or parcel-wrapping services,

While Mark Amodei has opposed the closure of rural post offices in CD-2, he’s fine with reduced operating hours and advocates for “robust reforms to the USPS” because its paper deficits will “leave taxpayers footing the bill unless serious changes are made to the current system.” Translation: CD-2’s representative in congress is onboard with the ongoing Republican campaign to drive the USPS into oblivion. We need to get behind the efforts of Senate Democrats to rescue and revitalize our Postal Service, especially on behalf of rural communities that depend on it most.