The US Postal Service has become a political football. The media’s reporting on the subject cares only about Leftist talking points related to voting. The USPS has real problems. They were present before the Left thought up their latest political talking points.
The House may return from recess to consider legislation to block changes the USPS made. USPS is attempting to act responsibly in managing its long standing financial woes. The House is in election mode. It is making a mistake that will be costly to mailers and taxpayers.
Creating a federalism issue where none exists
There will be an increase in mail-in voting in the 2020 presidential election. The fear mongering of coronavirus makes that a certainty. This is prompting the USPS to send letters to states with warnings. The laws of 46 states are “incompatible” with the agency’s “delivery standards.”
State election law creates this issue. This is neither the USPS nor the federal government’s issue. The USPS prioritizes mail related to elections.
The Washington Post notes, “[P]ostal workers have long informally treated election mail — including voter registration materials, voter information and ballots — as first-class items, affording them privileges their 20-cent price point ordinarily would not allow.” This will not change.
Electioneering not governing
There is no evidence of USPS is involvement in any election shenanigans. The changes at the USPS and the letters to states provide congressional Democrats a line of attack. They are more focused on attacks against President Trump than they are on allowing the USPS to at least breakeven. USPS is losing $8 billion per year. That used to actually be real money. The U.S.P.S. needs an overhaul.
Section 6001 of the Coronavirus Aid, Relief, and Economic Security (CARES) Act increases USPS borrowing authority by $10 billion. The terms of the loan is part of a recent agreement. This loan postpones the impending liquidity crisis. It must also be repaid. It USPS is losing money it has a cash shortage. Business forecasts do not support ability to repay unless something changes.
The USPS isn’t going to run out of funding before the election. It projects it has sufficient liquidity to continue operating through at least August 2021. Got that? USPS has a cash crisis coming in about a year.
Congressional Democrats are creating a crisis where none need exist. It apparently is their way of manufacturing advantage at the cost of the tax paying public. The Democrats are refusing to make the tough choices required to put USPS on firm financial footing. U.S.P.S. needs an overhaul.
Throwing money and claiming to solve… what?
Instead the Democrats wanted to bail out the USPS. They want to paper over the underlying issue to the tune of $25 billion in the HEROES Act. Democrats will do this while also imposing a slew of federal mandates on how states conduct federal elections. They want to mess with USPS reform and supersede state election law. It is a breath taking act of wasteful spending coupled with an attack on federalism.
The USPS doesn’t need a bailout. What it needs is to change its business model. The Government Accountability Office (GAO) released a report in May. It notes that as of FY 2019, the USPS had $161 billion in unfunded liabilities plus debt. It offers some ideas Congress should consider to address these growing financial woes. Usurping state election law was not among them.
GAO states the facts of the situation
The GAO explains, “Regarding USPS, reassessing its business model should start with the level of required postal services… For example, delivery is USPS’s most costly operation; USPS officials estimate annual savings of $1.4 billion to $1.8 billion if delivery of mail were reduced to 5 days rather than 6 days per week.”
Reducing the number of days that the USPS delivers mail has been floated before. Congressional Democrats and labor unions are blocking reform. This was true even when President Obama proposed the reforms.
The report continues. “Second, USPS is to function as a financially self-sustaining entity; however, it does not. A reassessment could include determining whether some of USPS’s costs and liabilities should be borne by taxpayers,”
“Third, alternative institutional structures for USPS range from a federal agency to a private company. A bankruptcy proceeding is not an effective or appropriate means to address the issues associated with a potential USPS restructuring, according to the National Bankruptcy Conference.”
Mail volume is rapidly declining, peaking in 2006 at 213.1 billion pieces. Digital communications such as email and text messages and online payment systems are displacing mail. The existing problems in the USPS have been made worse by coronavirus. Mail volume is down in FY 2020. Losses are expected to be even higher than last year. The USPS hasn’t been breakeven or better since 2006. That’s 14 straight years of losses. This is a case of failure to recognize the right answer when told. The USPS annual operating deficit was nearly $75 billion at the end of FY 2019. U.S.P.S. needs an overhaul.
How to solve the problem… Change the make up of Congress
Congress is responsible for the USPS’s problems. In 2006, Congress passed the Postal Accountability and Enhancement Act. It requires the USPS to fund retiree health benefits in advance. Prior to this, the USPS had a pay-as-you-go system. Congress actually specified the annual payment. It can be found in 5 U.S.C. 8909a(d)(3). It was for fiscal years 2007 through 2016 and established a formula to determine the annual payment for FY 2017 and after.
The USPS has not made this payment since FY 2011. This contributes to the growth in its unfunded liabilities. The USPS Fairness Act, H.R. 2382 and S. 2965, would return the USPS to a pay-as-you-go system. This leaves taxpayers on the hook for tens of billions of dollars in unfunded liabilities the USPS has racked up. The GAO has given Congress options for how to address the unfunded liabilities for health benefits. This isn’t the only unfunded liability the USPS has. But doing nothing means that the trust fund will be depleted in 2030.
The recent changes at the USPS may have come at a bad time. Considering how this is being used as a political football presidential election. The truth is that the USPS has long-standing financial issues and is in a cash crunch. The loan from the federal government has only delayed the inevitable. Throwing money at the USPS appears to be what House Democrats are ready to do. The U.S.P.S. needs an overhaul, if it is not completely privatized.
