Bill would strengthen U.S. Postal Service
One of the few areas of bipartisanship comes in a plan to make the postal service more self-sufficient.
One of the few areas of bipartisanship in Congress comes in the form of a plan to revamp the U.S. Postal Service to make it more efficient and self-sufficient.
Some want to shutter the USPS, while others seek to transform it into a 24/7 one-stop-shop for email, printing, and banking. Neither solution is in keeping with our founders’ intentions regarding the postal service and certainly nothing like that modeled by our first postmaster general, Benjamin Franklin.
The good news is that Postmaster General Louis DeJoy has developed a 10-year strategic plan that will ensure USPS is a self-sustaining, user-financed operation.
A bill introduced by Sens. Rob Portman, R-Ohio, and Gary Peters, D-Mich., would build on DeJoy’s plan.
The bill codifies longstanding postal policy by formally requiring that mail and packages be delivered together at least six days a week. Package deliveries have been a lifeline during the pandemic, from seniors receiving their medications to small businesses struggling to reach customers to individuals purchasing essential supplies and consumer goods. That is especially true for rural areas. Package deliveries have helped to keep the postal service afloat, returning a net $11 billion to its bottom line.
The bill also requires the independent Postal Rate Commission to review its regulations regarding the pricing of package delivery to determine appropriate cost attribution. Under existing law, the postal service charges its direct cost for package delivery, plus an appropriate share for overhead. This 2006 measure was written to ensure that the postal service competed fairly in the private market with companies like UPS and FedEx. Under the proposal, the Postal Rate Commission would review how costs are attributed to mail and packages to ensure mail delivery isn’t inadvertently subsidizing package delivery. Notably, however, the bill correctly avoids setting any arbitrary mandated price floor for package deliveries.
Additionally, it bars the postal service from hosting email, printing and copying services, banking, and other non-postal commercial services. While most of us weren’t paying attention, progressives urged the postal rate commission to offer payday lending and a host of other so-called commercial services. That despite a key provision of the 2006 Postal Accountability and Enhancement Act limiting the postal service from expanding into non-postal business. Expanding into the financial arena is an especially terrible idea and would serve only to put taxpayers at risk. Fortunately, the Senate bill would reinforce the earlier decision to keep the USPS focused on the mail and package delivery business.
Finally, it ends the burdensome requirement that the postal service “pre-fund retiree health obligations.” The agency is obligated to set aside resources to provide and fund the benefit for future retirees even as health care costs explode. Fortunately, the bill ensures that while existing retirees continue being covered, new retirees will use Medicare (which they paid for during their working careers) like the rest of the American population, allowing the Postal Service to redirect its resources.
Absent this legislative relief and the action, the USPS says it will lose $160 billion over the next 10 years — which would eventually require a major taxpayer-funded bailout.
President George W. Bush signed the previous postal reform law in 2006. Since then, mail volumes have declined but package delivery has exploded. We should build on that development and let the Postal Service move to real profitability by doing what it does best — delivering mail and packages.
Franklin used his knowledge of the operations of the British postal system to establish a standard rate for mail and newspaper delivery, making the American postal system both profitable and efficient. That’s a model that we should emulate. The Portman-Peters bill will go a long way toward that goal.