The U.S. Postal Service is suffering along with so many other businesses through the coronavirus pandemic, and many people are hoping it will get a big bailout. Others argue that the USPS is antiquated and does not deserve the funds that could go to another sector of the economy. If the latter group gets their way, a postal service “collapse” could have serious impacts on life in the U.S.
Last week, the U.S. congress was warned that the USPS will “run out of cash” in September without federal assistance, according to a report by CNN. Lawmakers are split over this idea, with democrats generally in favor of supporting the USPS and republicans against it, according to an analysis by Vox. Democrats are hoping to write assistance for the post office into the fourth coronavirus relief bill, which is currently underway, while republicans want to keep that bill strictly focused on the Paycheck Protection Program for small businesses.
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President Donald Trump is also hesitant to commit any aid to the USPS. In no small part, this has to do with the president’s disdain for Amazon, and the company’s founder Jeff Bezos. Trump tweeted about the USPS’ lucrative deal with Amazon last month, saying that he thought the postal service should charge Amazon more for its services before asking the government for help.
Meanwhile, an old proposal among republicans has resurfaced again, suggesting that the USPS should simply be privatized. The service is already competing with UPS, FedEx and other courier services, and lawmakers argue it would function better if it committed to that rather than serving as a public utility.
There are a lot of moving parts to this debate, and it cannot be summed up too easily. Here is what a USPS “collapse” could mean, and some of the other outcomes currently being considered.
Changing Paradigm
While the USPS has taken a hit from the coronavirus pandemic, that is by no means the only thing weighing on the postal service. The USPS has seen a decline in business since 2001, when the use of paper mail hit its peak, according to Vox. For nearly two decades now, the USPS has simply had less mail to carry.
The USPS remains the only service in the United States that carries small parcels for daily mail services, so on the one hand it has a monopoly on its business. On the other hand, it has an obligation to carry out that function as a public utility, even when business is slowing down. In recent years, the USPS has begun competing with couriers like UPS and FedEx to move heavier packages as well, but it does not come out on top there either.
While the USPS is a government entity, it is important to remember that it is supposed to be completely independent from the federal government, funding itself through its services.
Subsidizing vs Privatizing
There are two solutions to the USPS’ problems often proposed, typically along partisan lines. To avoid closing post offices and laying off workers, democrats generally want to subsidize the post office while changing the rules that govern its function, allowing it to have more practical applications for today’s world. In the case of the coronavirus pandemic, democrats are now proposing $25 billion in operating subsidies to keep the USPS afloat.
Republicans want to change the rules as well — privatizing mail services as a whole and setting the USPS free to compete openly with UPS and other courier services. This would likely cause a huge spike in the cost of mailing letters, bills and other small paper parcels, and give the USPS incentive to focus on heavier packages, like its competitors. It would functionally restrict access to paper mail for lower income communities.
Public Bank
Part of the plan often cited by democrats would be to allow post offices to function as banks. This would not only give these public offices something more relevant to do in today’s day and age — it would create a public bank that Americans could rely on as an alternative to big corporate banks, much like a community credit union. Republicans generally oppose this idea.
Layoffs
Another outcome that neither side is really pushing for is that the USPS could simply shrink in size to match its lightened workload. According to Vox, this could include canceling Saturday delivery, closing post offices around the country and laying off massive amounts of workers.
Lawmakers on both sides of the fence tend to oppose this plan for a variety of reasons. For one thing, the post office is popular, and it provides reliable, union jobs in all communities. If post offices were to close based on lack of business, that would immediately impact small and low-income communities the most — particularly in rural areas.
Prefund Pensions
The only reason the USPS loses money is because Republicans demand it fund 75 years of retirement funds in advance, a thing no other government branch nor business does. Proposed solution: not do that.
— Dan Bogosian (@dlbogosian) April 12, 2020
There are smaller steps that could be taken to help the USPS adjust as well, such as fixing the way it handles pensions. Back in 2006, the then-republican majority congress forced the USPS to prefund decades’ worth of pension and retiree health costs — a practice that no other organization or business follows. At the time, it was part of congress’ plan to pressure the USPS into being privatized, but it never went that far.
If lawmakers could agree to let the USPS drop this rule, it might go a long way in helping to ease the service’s financial burden.
Trump vs. Amazon
I have stated my concerns with Amazon long before the Election. Unlike others, they pay little or no taxes to state & local governments, use our Postal System as their Delivery Boy (causing tremendous loss to the U.S.), and are putting many thousands of retailers out of business!
— Donald J. Trump (@realDonaldTrump) March 29, 2018
In all this mess, it’s impossible to ignore President Trump’s personal vendetta against Amazon and Jeff Bezos. An op-ed in New York Magazine from December points out the president’s history of “attacking” Amazon, often in relation to The Washington Post‘s coverage of him.
With all the recent talk about the USPS, Trump has repeatedly condemned the service’s dealings with Amazon, saying that it should simply charge Amazon more money to make up for its failing revenue. Many of his statements on this issue have been prove false, but have nonetheless fueled debate among lawmakers, pundits and on social media.
Calls to Action
Whichever plan lawmakers decide it, it is urgent that they choose one soon. With the USPS under threat, many officials are speaking up about how vital this public utility is, and how devastating its loss would be — especially during the coronavirus pandemic.
Postmaster-general Megan Brennan gave a private briefing to members of congress on Thursday, speaking to the House Oversight and Reform Committee. She told them that the pandemic “is having a devastating effect on our business,” adding: “American needs the Postal Service more than ever.” Virginia congressman Gerald E. Connolly also issued a statement on the importance of the USPS, published by The New York Times.
“I’m so frustrated at how difficult it has been for a long time to galvanize attention and action around an essential service,” he said. “And maybe the pandemic forces us all to refocus on this service and how essential it is and how we need to fix it while we can before it gets into critical condition.”
Finally, a statement from New York congresswoman Carolyn B. Maloney read: “I want to commend the brave men and women of the Postal Service for all they are doing in the midst of this pandemic. The Postal Service is holding on for dear life, and unless Congress and the White House provide meaningful relief in the next stimulus bill, the Postal Service could cease to exist.”
