The Plight of the Postal Service

By Ralph Nader

The United States Postal Service is in a freefall due to poor management, a starkly shortsighted, paralyzed Congressional leadership, and the steady march of right wing ideologues. Corporate competitors who advance corporatization have severely eroded the historic institution created by Benjamin Franklin; one that currently delivers over 150 billion pieces of mail a year and walks and drives all neighborhoods.


According to Postmaster General Patrick Donohoe, who spoke at the National Press Club inWashington D.C. two weeks ago, a massive, billion dollar bailout might be in the Postal Service’s future, unless drastic measures are taken. In his words: “Congress faces a simple choice: It can decide to start appropriating a lot of money to prop up a broken Postal Service or it can give the organization the flexibility to operate more effectively.”


Many practical, ignored reforms are necessary for our nation’s troubled postal system, but what is the “flexibility of operation” that Mr. Donohoe is referring to?


Notably, absent from his speech was the fact that the USPS has not taken any taxpayer money since 1971, or that the USPS is the only major corporation that is a net creditor of the United States government (the others receive varieties of corporate welfare.) According to USPS’s own Inspector General, the USPS has overpaid as much as $80 billion dollars to the Civil Service Retirement System (CSRS), which the federal government owes the USPS and refuses to return. Why didn’t Donohoe mention that in his speech?


Further, under his misguided leadership, the USPS has moved to raise rates and cut service — almost assuredly a poor turnaround plan to anyone with any sense. Any rational postal customer might ask, why should I pay more for less?


Mr. Donohoe put forth this strategy at the same time he oversaw over 100,000 postal job cuts, proposed closing thousands of post offices and the reduction of office hours, slowed delivery standards, and closed mail processing centers. Corporate competitors FedEx and UPS often provide express delivery with fewer glitches than then post office — in part because of the way the USPS has been undermined by its own management to actually subsidize FedEx and UPS. Senator Claire McCaskill makes this latter point frequently.


Of most concern is the Postmaster General’s downplaying of Congress’ decision to require an unparalleled prefunding of retiree health benefits. The USPS has been forced to pay out $103.7 billion by 2016 to cover future health benefits of postal retirees for the next 75 years. No other government or private corporation — not one — is required to undertake such an unreasonable, draining financial burden. It is the primary reason the Postal Service is in a financial hole.


The Postmaster General’s turnaround plan is reliant on scaling back, and not actively seeking out new sources of revenue. Many opportunities of new revenue exist for the Postal Service. One idea is the return of the Postal Savings System. From 1911 until 1967, the Postal Savings System offered simple savings accounts to anyone who preferred an alternative to a private bank. There are currently millions of lower income Americans who do not use a bank, and millions more who have to resort to exorbitant payday lenders and check cashing services, who could benefit immensely from a Postal Savings System. The USPS has more than enough retail locations to make such an endeavor very convenient to these consumers. (Princeton professor Sheldon Garon makes the case for such a systemin this article and in his book Beyond Our Means: Why America Spends While the World Saves[Princeton University Press, 2011]).


In addition, the USPS could explore ways to provide email and internet services to its customers, giving an affordable alternative to the telecom monopolies and cable companies that dominate the country’s broadband markets. After all, isn’t it the Post Office’s mission to provide Americans the ability to communicate with each other anywhere, all at an affordable, common rate? Other easy revenue generating ideas have been proposed by members of Congress and Ruth Goldway, Chair of the United States Postal Regulatory Commission: a notary service, selling fishing and hunting licenses, and ending restrictions on shipping wine and beer.


Another solution that would go a long way is the development of an independent, nonprofit Post Office Consumer Action Group (POCAG). The purpose of the POCAG would be to allow postal consumers to organize and use their unified voice to push for consumer-friendly postal policies. All it would take is a simple law directing the USPS to send mailers several times a year to its patrons and offer them the opportunity to join. Congressman Dennis Kucinich introduced such a law just last year (H.R. 6648). A public voice is vital to help protect one of America’s greatest public institutions. (Read ourPreserving the People’s Post Office by Christopher Shaw for more on this.


Congress shares much of the blame for the USPS’s plight, as its members take campaign contributions from USPS’s competitors. The USPS was once the symbol of reliability, punctuality and efficiency. Its defining mission is “to bind the nation together.” Much of that reputation has been damaged by the threat or actual rural post office closings, cuts in service (including the on-again off-again threat of ending Saturday delivery), and diminishing revenue due to the recession, an uneven playing field with UPS and FedEx, and the expansion of the digital age.


But there is much value in maintaining this historic institution. For example, UPS and FedEx do not have an emergency preparatory response in place in case of a major disaster or crisis. The Postal Service does — it bears the responsibility of a full federal agency. In the event of an emergency, the USPS is ready to deliver critical medicine and supplies to every residence in its enormous database of addresses. This response was put to the test and proved to be invaluable after Hurricane Katrina in 2005.


For over two centuries, Post Office buildings have been the gathering places in small towns and rural areas all across the United States. These are important intangibles. With some creative leadership and the support of Congress, there is no reason why the United States Postal Service cannot thrive for centuries more. Call the Congressional switchboard and let your Members of Congress know the value of preserving the post office — (202) 224-3121.