Chris Powell: Postal Service realities; bring back postal banking?
The Littleton (N.H.) Main Post office, opened in 1933. It’s surprisingly grand for a town with only about 6,000 residents. It’s on the National Registry of Historic Places.
MANCHESTER, Conn.
Maybe someday when the United States has a president who is not crazy or senile, a Senate majority leader who isn't his tool, and a House speaker who doesn't think that those who disagree with her are enemies of the state, the country can have a serious discussion about fixing the U.S. Postal Service.
President Trump recently suggested that he wanted to cut off money for the Postal Service to hamper the voting by mail desired by Democratic leaders. The postmaster general, a big donor to the president's campaign who is invested in companies that compete with the USPS, had ordered economy measures that raised suspicion about his motives. But he has postponed those measures until after the election.
Since throwing fantastic amounts of money at everything has become national policy, the other day the Democratic majority in the House passed an emergency appropriation of $25 billion for the Postal Service with barely a thought about the service's inefficiencies and potential.
Just as the president seems to want to weaken the USPS for partisan reasons, the Democrats seem to want to keep it operating just as it is because it employs about 600,000 people, most of them belonging to a union that supports Democrats. In the Democratic view, delivering the mail efficiently seems to be secondary.
The Postal Service long has been losing big money. It has not come close to covering its costs for the last 13 years, during which its losses have totaled $78 billion. Its unfunded pension and retirement medical insurance liabilities are worse.
In 1971 the USPS was taken out of the regular government and made a supposedly independent agency in the hope that regular business practices would be applied and improve efficiency. But this didn't accomplish much. Mainly postage prices rose as government's direct subsidies were withdrawn, and the Postal Service's financial position worsened.
{Editor’s note. Much of the Postal Service’s financial woes stem from a 2006 law passed by the Republican-run Congress in a lame-duck session that mandated that the USPS pre-fund its employee-pension and retirement costs, including health care, not just for one year but for the next 75 years—a crippling requirement not imposed any other enterprise. The year that mandate passed, the Postal Service had a $900 million profit.}
Customer services have been expanded but mail volume has fallen sharply, first because of the Internet and lately because of the virus epidemic, so the Postal Service doesn't make full use of its vast infrastructure.
Its defenders, mainly Democrats, note that the USPS was never supposed to earn a profit but to knit the country together. It has done that well. But some of its defenders imply that because it wasn't meant to make money, it's all right for it to lose any amount of money -- that its primary purpose now is not delivering the mail but employment and that postal employment is the best use of the money being spent to cover losses.
Republicans are suspected of wanting to privatize the Postal Service or cripple it by repealing its monopoly on delivery of first-class mail. Certainly private companies might do better with such mail in some respects, but the law requires the USPS to serve all people in the country at the same rates -- to make not just the less expensive deliveries of densely populated areas but the more expensive deliveries in the remote countryside. The Postal Service is a great gift to rural areas, the country's breadbasket.
Urban areas also might find the USPS more of a gift if postal banking was restored. From 1911 to 1967 the Postal Service office offered modest savings accounts. While their appeal diminished with federal bank deposit insurance, which came because of the Great Depression, the Postal Service still sells money orders and might offer not just savings accounts again but also basic banking services to poor people whose patronage commercial banks find unprofitable and who use expensive payday lenders and check-cashing services.
Of course, the Postal Service probably would not break even in the banking business either, but helping the poor save and learn banking would elevate them and give commercial banks some much-needed competition.
In any case the USPS has a big underused infrastructure even as it still knits the country together. But like nearly everything else in government, its employment costs are excessive. If actual governing ever resumes in Washington, improving the Postal Service while making it break even should be high on the agenda.
Chris Powell is a columnist for the Journal Inquirer, in Manchester, Conn.