Amid the chaos of the coronavirus pandemic, there is one brewing crisis that is being overlooked. Although it may seem inconsequential compared to the many other issues today, this crisis will have permanent and widespread effects on our country. It is a crisis at one of the longest-running institutions in our nation’s history: the US Post Office.
One side-effect of the pandemic is that mail volumes are crashing. Despite the upturn in online retail and delivery, overall use of mail services is drastically down. The Postmaster General projects this crash will lead to a $13 billion decline in annual revenue, and she warns the USPS will “run out of cash this fiscal year.” That timeline leaves around five months until the Post Office collapses.
The dire situation of the USPS is surprising considering how quickly the Federal government has moved to bail out other sectors. In the recent stimulus bill (The CARES Act), Congress allocated $150 billion for state and local governments. Even that assistance pales in comparison to the $4.5 trillion (with a “t”) unlocked for corporations. Congress and the White House are very eager to protect private businesses, but they are less willing to sustain this public agency. The CARES Act gave the USPS only $10 billion in loans that need to be repaid; the Postmaster General requested $25 billion just to offset losses. The apathy can be traced primarily to President Trump. The White House threatened to veto the stimulus bill if it contained aid for the USPS, so lawmakers had to scrap the original $25 billion plan. If Trump stays so opposed to USPS aid, there might not be any assistance in future stimulus bills.
Needless to say, blocking help to one of the longest-running programs in US history while giving trillions of dollars to private corporations is despicable and illogical. Aside from the hypocrisy, though, protecting the USPS is critical for millions of lives and our economy.
If the Post Office goes under, mail service in the United States will crash as well. Especially for the first few months or even years, the entire practice of shipping will be in turmoil.
Despite how widespread FedEx, UPS, and even Amazon have become in the shipping and mail industry, they have not managed to replace the USPS. In fact, all three of these companies rely on the Post Office for their success. UPS and FedEx ship tens of millions of packages through the USPS every year. The Post Office—because it serves every community and every mailbox across America—is critical for the private companies’ last-mile service. A common practice for UPS and FedEx is to ship packages long-distance themselves and then pass it onto the USPS for home delivery. Amazon is in the same boat. This corporation actually owes more to the USPS; the Post Office’s services allowed the e-retailer to exist and grow in the first place. Even after decades of private mail, no company has managed to exist without relying on the USPS. This dependence makes the collapse of the Post Office so terrifying
If the Post Office goes under, mail service in the United States will crash as well. Especially for the first few months or even years, the entire practice of shipping will be in turmoil. We cannot afford this crash. If the pandemic continues into the Fall, we will need delivery service so people can stay away from crowded stores. Even outside crisis conditions, we need mail to run businesses and deliver life-saving medications—we cannot just lose it, even temporarily. If mail services became completely private, retailers expect higher prices that will be passed onto consumers. The USPS is critical for our economy and our recovery from the current recession.
The USPS is also necessary for rural communities. By law, the Post Office must have uniform pricing across the country. There’s a good reason for that policy. Delivering to secluded, rural communities is expensive. The flat rate allows revenue from dense, urban areas—where shipping is cheap and easy—to cover delivery in the country. Without the USPS, mail prices would skyrocket outside metropolitan areas. Buying from Amazon or eBay would become unaffordable. Shipped prescription drugs would be even more expensive. Paying bills by mail (a necessity for rural residents without access to reliable internet) would get harder. Expenses for small businesses would go up. All of these problems assume that mail service continues to exist in rural communities; that is not likely. UPS and FedEx do not operate offices in these secluded areas; they rely on the USPS even more in these places. These private carriers would not be apt to expand in a world without the Post Office. The costs of rural delivery are just too high, and consumers would be unwilling to pay the extreme prices. The profit-driven models of these companies give no incentive to operate in the country. Some European countries have privatized their mail carriers, and they have seen this scenario play out with higher prices and reduced access. If the Post Office goes under, millions of Americans will probably lose their ability to send or receive mail entirely. People who rely on mail would literally have to move to survive.
USPS is also necessary for elections. Some small communities in America only have vote-by-mail because there are no reasonable locations for polling places. Disabled, elderly, and overseas voters also need mail-in ballots. This November, where it is still an open question whether lockdowns will end, we need vote-by-mail for our own safety. The USPS projects it will run out of money by September; if we do not save it, the election could become impossible.
Saving the USPS is necessary not only to protect our economy, society, and elections, but also to correct a backhanded attempt to sell off one of the oldest institutions in America.
With such importance to our economy and society—and an approval rating around 90 percent—it makes no sense that the USPS was not protected in the CARES Act, and it makes no sense that Trump is so against it. There is, however, an ulterior motive that explains the White House’s actions: privatization of the Post Office. Privatization of public services is a common refrain for conservatives, especially in the neoliberal era. Calls to privatize programs like Social Security or Medicare are common in the Republican party. Trump even floated privatizing USPS a few years ago. Privatization schemes for the USPS are nothing new. In 2006, a Republican-controlled Congress passed the PAEA Act, which made reforms to the Post Office. Among the relatively normal changes was an insane requirement. Lawmakers forced the USPS to pre-fund 100 percent of its retiree health benefits for fifty years in advance. This nonsensical rule has cost the USPS tens of billions of dollars. Prefunding literal decades of benefits 100 percent is something that no other organization on Earth does, and it is this law that has caused the USPS’s financial problems in recent years. Despite declining mail volume, the Post Office could still turn a profit without this rule. The PAEA Act has earned a nickname of the “most insane law ever passed by Congress.” However, it is not that insane if the goal is to privatize the Post Office. After all, forcing the agency to go bankrupt could give lawmakers leverage to label it a failed project. Selling it off becomes much easier if it starts costing taxpayers money. The PAEA Act’s costs have stopped the USPS from investing in itself and increasing revenue, and it has left it cash-strapped during our current crisis.
Saving the USPS is necessary not only to protect our economy, society, and elections, but also to correct a backhanded attempt to sell off one of the oldest institutions in America. We have seen the government mobilize trillions of dollars to save wealthy corporations, so it only makes sense to protect this critical public service, as well. The Trump administration needs to abandon this dangerous strategy and come to the table to save the USPS. If we fail, the livelihoods and ways of life for millions of people are in peril.
Kevin Sciackitano is a second-year CLEG major in the School of Public Affairs. He is Deputy Editor of Economics for the Agora.
Image courtesy William Gill, Creative Commons