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EDITORIAL

Save the Post Office

President Trump shouldn’t stand in the way of emergency loan to keep mail flowing

Posted 4/29/20

To hear President Trump speak at times, it’s difficult to believe he’s ever been involved in running a business. Take his latest salvo against the U.S. Postal Service, which he described …

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EDITORIAL

Save the Post Office

President Trump shouldn’t stand in the way of emergency loan to keep mail flowing

Posted

To hear President Trump speak at times, it’s difficult to believe he’s ever been involved in running a business. Take his latest salvo against the U.S. Postal Service, which he described as “a joke,” while threatening to withhold a $10 billion emergency loan recently approved by Congress as part of one of its recent COVID-19 funding packages.
Trump said he’s told Treasury Secretary Steve Mnuchin to withhold the loan funding until the Post Office agrees to increase the fees it charges for package delivery. Trump says their rates should be “quadrupled.”
Trump’s advice to the Postal Service is on par with his recommendation last week that the nation’s healthcare professionals should explore injecting chemical disinfectants, like bleach, into the veins of COVID-19 patients, since such disinfectants work so well on your kitchen counters. His suggestion to the Post Office would be just as fatal if anyone took it seriously.
While the Post Office has long generated most of its profits on its first-class mail delivery, with the mail volume steadily declining in recent years, and down sharply since the outbreak of COVID-19 in the U.S., its mail revenues have fallen significantly. That’s left the Post Office increasingly dependent on its package delivery business to generate the cash flow the service needs to operate.
Sharply increasing, much less quadrupling, the fees that the Post Office charges for packages won’t generate more revenue, or profits. While the Post Office essentially has a monopoly on first-class mail delivery, it operates in an incredibly competitive environment when it comes to package delivery. Companies like UPS, FedEx, and a long list of other package delivery services would eat the Post Office’s lunch if the service is forced to jack up its delivery fees just to please a president who is virtually clueless on the subject.
And that could spell the end of the U.S. Postal Service, an outcome that would be particularly devastating to elderly and rural residents, who still rely on the Post Office for their mail communications. It would be devastating as well to many small businesses, including newspapers, that serve rural areas and rely on the Post Office for delivery of products and invoices. Perhaps most of all it would be devastating for the 600,000 Postal Service employees who keep the mail flowing.
While President Trump, bizarrely, blames Amazon for the woes of the Post Office, the biggest threat to its future operations is the 2007 decision by Congress to force the Post Office to prefund all of its retirees’ health benefits, something that is not required of private sector companies. Private companies are only required to prefund defined pension obligations, although few companies maintain such pension programs anymore.
The Post Office actually still makes money on its operations— but it’s been forced to divert billions of dollars a year to its future health care obligations. It looks fine on a balance sheet, but it’s stripped the Post Office of operating funds and forced them to take cost-saving measures (like closing its Duluth sorting facility, sending all mail from this region to Minneapolis) that have had a negative impact on mail service. The cash drain has also prevented the Post Office from making investments to modernize its operations for greater efficiency and competitiveness.
And maybe that’s part of the plan. Conservatives have long disliked the Post Office, preferring such a service be provided by the private sector. The founding fathers had no problem with a government-run Post Office, which is why they expressly authorized Congress to create post offices and post roads. And, by the way, good luck finding a private company to deliver a letter to any mailbox, no matter how rural, for 49 cents. Without the Post Office, we’d be paying far more for that service.
While times and methods of communication have changed, the Post Office still provides an invaluable service to the elderly, rural residents, and the millions of small and large businesses alike that rely on the Post Office for billing or for product delivery. Congress created the biggest problem currently facing the Post Office, but at least Congress was willing to free up funds to help the service during the current economic downturn. President Trump shouldn’t stand in the way.

Comments

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Dan Edeen

The author must be a postal worker or related to one. It is odd that the author isn't cited in the editorial. The postal service has been in serious

trouble a lot longer than Trump has been in office - lost $69 billion over 11 years, and you know that the injecting Lysol story is complete B.S.

As I quote from the GAO link below, the postal service has been in financial decline for a long time.

SPS financial viability continues to be high risk because USPS cannot fund its current level of services and financial obligations from its

revenues. As stated in GAO’s 2019 High-Risk update, USPS faces financial challenges that include the following:

Poor financial situation: USPS’s overall financial condition is deteriorating and unsustainable. USPS has lost $69 billion over the

past 11 fiscal years—including $3.9 billion in fiscal year 2018. USPS’s total unfunded liabilities and debt ($143 billion at the end of fiscal year 2018) have grown to double its annual revenue.

Insufficient cost savings: The savings from USPS cost-reduction efforts have dwindled in recent years. Although USPS has stated that it will

aggressively reduce costs within its control, its plans will not achieve the kind of savings necessary to significantly reduce current operating costs.

Unfavorable trends: USPS’s expenses are now growing faster than its revenues—partly due to rising compensation and benefits costs and

continuing declines in the volume of First-Class Mail.

USPS Unfunded Liabilities and Debt as a Percentage of USPS Revenue, Fiscal Years 2007 through 2018

Further, USPS has missed $48.2 billion in required payments for postal retiree health and pension benefits as of September 30, 2018.

This includes $42.6 billion in missed payments for retiree health benefits since fiscal year 2010, and $5.6 billion in missed payments

for pension benefits since fiscal year 2014. If USPS does not make any more payments for retiree health benefits, the fund supporting these

benefits is projected by the Office of Personnel Management to be depleted in fiscal year 2030. If the fund is depleted, USPS would be r

equired by law to make the payments necessary to cover its share of health benefits premiums for postal retirees. However, current law does not address what would happen if USPS misses those payments. Depletion of the fund, together with USPS’s potential inability to make remaining

contributions, could affect postal retirees as well as USPS, customers, and other stakeholders, including the federal government.

Source: https://www.gao.gov/key_issues/us_postal_service_financial_viability/issue_summary

| Tuesday, May 5
jtormoen

Me smells a rat regarding the Edeen comment. Formatting a document is not that difficult.

Wednesday, May 6
bonfire

The US Postal Service is Americans' most popular agency, far more than the National Park Service and NASA. Pew Research Center survey last year found 90% of the public had favorable view of USPS. It's easy to to see why as Marshall has referenced above but would add that many senior citizens and other Americans, often living in rural areas, get their prescriptions and medical supplies delivered by the Post Office. Higher delivery costs and uncertain delivery would be devastating for them.

Conservatives never seem to stop pushing for privatizing our mail service even though that would mean lousy service and huge price increases. I don't doubt they want to get their hands on postal workers' pension money. It's not like they haven't meddled with other government workers' pension benefits before.

Postmaster General Megan Brennan since 2015, a 33 year veteran of USPS is retiring this month. Trump harassed her continually over USPS deficits and the fees charged for Amazon deliveries. Amazon, FedEx, etc. rely on USPS to deliver their packages to even the most remote, hard to navigate destination. A top Republican fundraiser and trump ally, Louis DeJoy, is set to become the new Postmaster General.

Trump claims Amazon gets "sweetheart" deals but also told reporters, "The Post Office should raise the price of package delivery four times. Journalist Kevin Drum went on USPS website and got a price sending a one pound package at retail ground rates from CA to NY, $9.35, 4 times that would be $37.40.

Trump has had a vendetta against Jeff Bezos, Amazon CEO, for a long time. He really, really wants to hurt Bezos. One reason is that Bezos owns Washington Post. I doubt trump could hurt Bezos much as he is worth something like $145 Billion but trump has been in a jealous rage that Bezos is far, far more wealthy than he is.

Then there is the vote by mail issue. A majority of Americans favor changing law to allow everyone to vote by mail and certainly wouldn't want to have delays in mail delivery. I can't imagine anyone wouldn't want to vote by mail especially now during a pandemic, wearing masks, standing in line for who knows how long trying to stay a safe distance from others. Oh wait, that happened in Wisconsin judge election recently with WI Republican legislators pushing hard against vote by mail. Far less WI polling stations because many poll workers didn't want to be exposed to Covid-19 and there appears to have been more people testing positive after voting in person.

Trump said "mail in voting is a terrible thing...corrupt...I think you vote, you should go." He also said there's "tremendous potential for voter fraud and for whatever reason, doesn't work out well for Republicans." Experts say voter fraud involving mail-in is rare. Somehow trump is convinced that mail-in voting benefits Democrats. That makes no logical sense unless he is afraid he'd lose if every eligible to vote American did vote. Trump said all this after he voted by mail in March Florida GOP primary.

Wednesday, May 13