As Trump Pushes to Privatize the Troubled US Postal Service, Others Push Back
U.S. Rep. Emanuel Cleaver recalls the days when, every morning at 10, his grandmother would walk to the post office in Waxahachie, Texas, to catch up with friends, family and other community members.
“The postal service is, for rural America, more than a mail delivery system,” Cleaver, a Kansas City Democrat, said in a phone interview. “It’s a link between people who would like to have interaction with other people in their community, and they do so at the post office.”
President Donald Trump is calling for privatization of the floundering U.S. Postal Service, aiming for its eventual sale as a completely independent corporation. Cleaver and other lawmakers say rural communities would be left in the lurch.
The original Post Office Department, started in 1775 with Benjamin Franklin as its first head, has a long history of promoting communication and connection between citizens. It became the U.S. Postal Service, a government-owned corporation, in 1971.
Since then, the service is primarily self-funded. It borrows money from the federal government, is regulated by Congress and needs approval before raising prices or making other significant changes. It also has serious financial problems, losing $2.7 billion last fiscal year and $540 million in the first quarter of this year. Since 1971, it has racked up a total deficit of more than $60 billion.
RELATED: How Amazon is helping the US Postal Service, despite what Trump thinks
Proponents of Postal Service privatization say current federal oversight imposes unfair restrictions on the agency’s ability to compete against privately owned UPS or FedEx. Privatization, they say, would allow USPS to make the necessary changes — to employees, benefits, services and prices — to be profitable.
UPS ranks No. 1 and FedEx No. 2 on the Transport Topics Top 100 list of the largest North American for-hire carriers.
In Missouri and Kansas, the Postal Service provides more than 218,000 jobs, according to a mailing industry survey.
Post service privatization in European countries has resulted in “significant restructuring, including shrinking their physical and personnel footprints,” the White House proposal says.
Opponents say the right solution is to relieve some regulatory pressure rather than remove USPS from all federal oversight. They also say privatization would result in the highest prices and lowest amount of service in rural areas, where people rely on their postal offices the most.
Since the passage of a 2006 bill, USPS has been required to pre-fund employee health benefits until 2056 — a $5 billion annual cost, and the service’s largest financial liability. Opponents argue that requirement should be changed rather than the service completely privatized, which is akin to cutting it loose completely.
U.S. Sens. Jerry Moran, (R-Kansas), Claire McCaskill, (D-Missouri), and Roy Blunt, (R-Missouri), have introduced a bill that would do exactly that, among other things. Cleaver, a Kansas City, Democrat, signed on to the House version.
Sen. Pat Roberts, (R-Kansas), also opposes privatization, and his office said he is considering co-sponsoring the reform bill.
RELATED: Postal Service - more financial loss as mail delivery slumps
The reforms would increase the price of stamps by a cent; allow the Postal Service to ship beer, wine and liquor to bring in more revenue; and, most important, shift retirees’ health benefits to Medicare.
Cleaver said that when people start talking “about shutting down the post office, I’m getting really upset because these are people who are ignoring or — to be more generous — who just don’t know about the sociology of rural America as it relates to the post office.”
Kansas City-based Hallmark Cards also is pushing back against privatization. The company has spent $1 million since the 2016 election lobbying for a continued six-day mail delivery week.
RELATED: Postal Service’s pricing methodology upheld by appeals court
“Privatization has been considered before,” CEO Don Hall said in a statement to The Star. “It is clear that it would lead to significant reductions in service, increased postal rates for consumers and a loss of access to postal services for many people. This seems contrary to the Postal Service’s mission of binding the nation together.”
U.S. Postal Service
Ike Brannon, an economist and senior fellow at the Jack Kemp Foundation, said he understands the attachment people have to USPS — his mail carrier once drove a family member to the hospital — but the service is running at a huge deficit, so something has to give.
“It’s difficult for Congress to do anything that smacks of being a radical change, regardless of how necessary it is,” Brannon said. “The sentimental attachment people have for their local post office makes this thing even more difficult. … A friend of mine who’s a congressman said more people contact him when a post office is closing down than on any five other issues.”
The USPS is hamstrung by more than $100 billion in healthcare benefits owed to retirees, the White House proposal says, and government requirements to deliver six days a week to more than 150 million addresses adds additional costs.
“Major changes are needed in how the Postal Service is financed and the level of service Americans should expect from their universal service operator,” the proposal says, and this would allow the service to someday be spun off from government ownership and become a completely independent corporation.
Trump created a task force in April to examine the USPS and find more solutions, and its findings are to be released in August.
The Postal Reform Act’s suggestion to shift employee benefits to Medicare wouldn’t fix the problem, Brannon said, because the government would still be paying the bill, just from another pot.
“It may make their balance sheet a little bit better, but it’s not getting the government off the hook,” he said. “At some point somebody is going to be left holding the bag.”
Privatization would allow the postal service to stop delivering six days a week to every person’s door and adjust prices, the proposal says. It also would let USPS negotiate benefits and pay its workers in line with what FedEx and UPS pay theirs.
“It might look different,” Brannon said. “You might not have people at the new post office who are working behind the counter making 60 grand a year.”
Privatization would likely affect rural communities the most, but it would ultimately be better for the Postal Service and save a lot of money for the country, he said.
It would be difficult for some people, but it would push them, too, to adapt, Brannon said: “The reality is we’d get more and more things accomplished via the internet that the post office used to do.”
Some argue that newer doesn’t necessarily mean better.
Cleaver said his cellphone number, home address and Social Security number were leaked after the Kremlin hacked the Democratic National Committee in 2016. New technology, while fast and convenient, has its drawbacks, he said, and the postal service has protected users’ privacy more strongly than tech companies such as Facebook.
“You can call me a troglodyte or a Cro-Magnon — it doesn’t matter to me — but I want my correspondences to be private,” he said. “Just because it’s new and faster doesn’t mean it’s sacred and better.”
