CORONA WATCH--The United States Postal Service is the most ubiquitous face of the federal government (with over 34,000 offices, delivering mail to over 160 million addresses) as well as the most well-regarded (scoring 10 points higher than the Centers for Disease Control and Prevention in 2019). It’s in the Constitution (which it actually predates) and it’s helped bind Americans together ever since. But in the midst of the covid-19 pandemic — when its service is more essential than ever — rightwing billionaires could finally realize their decades-long dream of destroying it as it now exists, and privatizing whatever fragments seem profitable enough for continued plundering.
“For more than four decades, USPS has faced calls for privatization,” a February 2020 report from the Institute for Policy Studies noted. “Think tanks have led the charge, supported by corporations like United Parcel Service and FedEx that stand to gain from privatization.”
With so much going on all at once, there’s a very real chance that the US Postal Service could be forced to close, before the public even realizes what’s happening, just when voting by mail is needed more than ever. “Some time between July and September, the post office will likely run out of money,” says Mark Dimondstein, president of American Postal Workers Union, told In These Times in mid-April. “And when they run out of money, their operations will cease.”
“Democrats are going to have to step up to fix the situation,” Congresswoman Nannette Barragán told Random Lengths News, “because we just haven’t seen any Republican leadership on this.” A $25 billion grant was stripped from the $2.2 trillion CARES Act on the insistence of Donald Trump, with no notable Republican dissent. “Our Republican colleagues need to push back,” she said. “It’s not about a partisan issue.”
“It is insane that the Republican Party would be the obstacle in saving the Postal Service, when the reddest of the reddest areas of this country are the ones that are most reliant on the Postal Service,” said Sarah Anderson, lead co-author of the IPS report.
Trump’s opposition is rooted in his vindictive hatred of the Washington Post, whose owner, Jeff Bezos, also owns Amazon. Blinded by hatred, Trump has repeatedly and falsely claimed that the U.S. Postal Service loses money on every Amazon package it delivers. In fact, package delivery is a major profit center.
The resulting freeze out contrasts sharply with the aid offered to large private businesses that aren’t performing essential services.
“If you can bail out the airlines, the cruise ships, you can certainly help the Postal Service,” APWU Regional Coordinator Omar Gonzalez told Random Lengths. “Make it fair, be fair for everybody. “
But fairness seems to be in very short supply. “We wanted to make sure that we were included in some of the things that were appropriated or granted to other companies,” he said. But they’ve repeatedly been left out of consideration.
“We were looking for some funding for the Postal Service in order to just back up the public service angle of it,” Gonzalez said. “We are delivering all different types of mail — delivering medicine, results of tests, health information, you name it, we deliver it.”
Then there’s the Families First Act, providing extra leave for employees who are sick or seeking medical attention. “The companies that get them are actually being reimbursed by the government and the Postal Service was left out of that,” Gonzalez noted. “We have to pay that out of our Post Services coffers.” Looking forward, “We want to make sure that we are also included in any type of legislation that authorizes or plans hazard pay,” he said. “You couldn’t get any more frontline than postal work, other than being in the healthcare profession.” Carriers are out in the streets, but counter work is more dangerous. “We have people coming in who appear sick and we still gotta provide service.”
“One way that FedEx and UPS could get more generous support through the stimulus bill, the CARES Act is that they would qualify for the special aid going to the airline bailout, because they have cargo carrier divisions,” Anderson told Random Lengths. That “includes $4 billion in loans and $4 billion in cash assistance for payroll to keep employees working” in shipping, about half of which would go to FedEx and UPS.
So, “they’re being offered cash assistance, whereas all the USPS got in the deal was the offer of up to $10 billion in loans that’s subject to draconian conditions by Treasury Secretary [Steven] Mnuchin,” she said. “So, it’s unclear if they will access any of that 10 billion.”
Congressman Alan Lowenthal focused sharply on those conditions when he spoke to Random Lengths, pointing to a just-published Washington Post story about Trump’s Treasury department “leveraging” the loan “to force Postal Service changes.”
“The administration really doesn’t want a bailout,” Lowenthal said. “The administration would like to manage it, cut its finances, cut staff,” and crucial mail processing operations. “It’s just a way to eliminate the Postal Service,” he concluded.
A Post Office Burden
The backstory starts in 2006 with the Postal Accountability and Enhancement Act. “It was in the lame-duck session before the Democrats took control,” Lowenthal said. “The GOP controlled Congress required that the Postal Service divert its revenues to pre-fund their pension fund for 75 years in advance. That was like a knife into their heart. That started it, to demonstrate that they were not going to be financially viable, to move the Republican attempts to privatize it.”
“Nobody else has this kind of burden,” Anderson said. “It’s covering retirees who are not even born yet.”
“It’s outrageous that we are requiring them to do that,” Barragán stated.
That burden has had a significant impact, driving many of the problems described in our cover story, “Why Your Mail is Late.” But the IPS reports make two particularly important points. First, that the Postal Service remains fiscally much stronger than it seems. Without the unprecedented pre-funding requirement, it would have run a profit every year from 2013 to 2018. It has also fulfilled a much larger share of post-retirement benefits and pension obligations than other federal agencies or industry competitors. And it also stacks up best when compared to the top 10 largest U.S. corporations–companies like Apple, Amazon, AT&T, Walmart, ExxonMobile, GM and Berkshire Hathaway.
The false impression of a failing agency is extremely useful, the report notes:
By forcing the USPS to accumulate such massive reserves, the pre-funding mandate has in a sense “fattened the hog for slaughter.” For privatizers interested in acquiring only the most profitable postal assets, these reserves make the service even more attractive as the extraordinary retirement health care funding mandate has left the post office with post-retirement reserves (healthcare benefits and the already well-funded pensions – see below) that far exceed those of other large public corporations.
Thus, the eagerness of the privatizers should be seen as just one more indication of the soundness of the U.S. Postal Service, despite the erosion it has suffered.
The report’s second important point is there’s a relatively straightforward path toward setting things right. First, and most significant is to repeal the pre-funding mandate and allow the existing reserves to fund future costs on a pay-as-you-go basis. The House of Representatives has already acted to do this, passing the “USPS Fairness Act” on February 6 by a lopsided 309 – 106 vote, including 87 Republicans (vs 105 opposed.)
“It was really encouraging to see a large number of Republicans who stood up for the post office on that,” Anderson said. “It bodes well for getting Republicans to support the bailout.” It then went to the Senate, where Montana Republican Steve Daines is a co-author, but the covid-19 outbreak disrupted further action.
Another simple step would be allowing its retirement funds to be invested more profitably, including stock index funds, rather than being limited to low-interest Treasury bills. The formula for determining pension obligations should also be switched from being based on projected costs to being based on those legally incurred, which “would reduce USPS’s accumulated retiree health fund deficit by $41 billion.”
But that’s not the whole story, Anderson explained. Before the pandemic erupted, IPS was working on a paper about how the Postal Service could meet a broader range of needs, such as postal banking, and health and environmental monitoring — as has been explored by other countries. In fact, postal banking also existed here in the U.S. from 1911 to 1966, while informal health monitoring already occurs.
“Everyone knows that postal workers are the eyes on the neighborhood, and they notice things, they have saved a lot of lives by noticing people who are not picking up the mail and things like that,” she said. A more formalized system could help reduce the cost of baby boom retirement by following the example of other countries that “have found it’s really helpful to have their post workers be part of the care economy by allowing people to stay at home and reducing the worry of their family members that there’s someone checking in every day.”
Environmental monitoring could “monitor everything from potholes to carbon emissions,” she said. But there’s another huge environmental benefit the Postal Service could deliver: electrifying its fleet of over 200,000 vehicles could have a massive impact in speeding reductions of fossil fuel emissions. The vast majority are carriers, whose limited range and stop-and-go operations are perfectly matched to electric vehicles’ strength.
In fact, author and radio host Thom Hartmann told Random Lengths that the threat of doing this was the reason behind the 2006 Postal Accountability and Enhancement Act. In February 2006, the U.S. Postal Service held a press conference in San Diego. “They showed off a fuel-cell and a 10 ton electric truck, and talked about how they had the largest fleet of vehicles in the United States and they were going to turn the entire fleet over the course of the next few years from gasoline and diesel into electric and hydrogen, and they were going to go green. It was probable at that time,” Hartmann recalled. “In fact, I had somebody from the post office on my show about that issue.”
The announcement “got a fair amount of publicity,” Hartmann said, but then, “Surprise, surprise, a few months later the Republicans rolled out this thing where there’s going to be a crisis in 75 years in the post office, because they going to have people retiring in 75 years who will not have access to health care.”
Alternate Future Coinciding
IPS has a different explanation, based on budget manipulations, but both can be true simultaneously. And fleet conversion was a lively topic at the time—it was part of the discussion shaping the ports’ Clean Truck Plan, for example. The U.S. Postal Service did continue to dabble with demonstration projects, but with its massive new pension obligations investing in a whole new fleet—no matter how cost-effective in the long run—was obviously off the table.
But it need not be now. It all depends on the path we choose to take. Hartmann is pessimistic in the short-term. “I think we are going to slide into a depression. I think it’s in the last several years,” he said. But beyond that, he says, “We have to remember that in the 1930s, the Great Depression hit the United States and Germany equally hard, and Germany had Adolf Hitler, and the United States had Franklin Roosevelt. In the end we actually had two very different outcomes from that Great Depression.”
So, the fight to save the U.S. Postal Service right now is not only important in itself. It can help set the tone for generations to come — if people wake up to what’s going on.
“Ultimately, what the current crisis will do is make people think about really, what would it be like if we didn’t have a public service? What if the Postal Service shuts down in a matter of months?” Anderson said. “What would it do to the small businesses across the country? To people who rely on them for their medication? And just on and on and on.” Rural communities would be especially hard hit, of course.
“I don’t think people have really grappled with that. They’ve sort of kicked the can down the road,” she said. “What’s most upsetting to me, I think, is that the focus has been so much on how do they cut their way out of their financial challenges instead of building on the Postal Service’s rich history of innovation and responding to changes and doing in a way that can also in help their financial situation, like expanding financial services, or providing other things.”
“It’s a battle,” Lowenthal said. “It’s part of a war. We gotta get the Postal Service through this next year, and we’ve got to take back the Senate and the presidency.” Survival is the issue of the moment.
But the positive possibilities are also in the air. Shortly before we spoke, Barragán had published an op-ed in The Hill, “The next stimulus bill will help save our economy — it should transform it, too,” arguing for a green stimulus.
“When talking about investing in a green economy, it’s things like this [converting the U.S. Postal Service fleet] that we should be investing in,” she said. “The U.S. Postal Service has been asking for assistance so they could upgrade their fleet and so there’s no better time than now.”
(Paul Rosenberg is senior editor at Random Lengths.)
-cw
