Congress and President Trump have responded to the coronavirus crisis with trillions of dollars of relief, and in all likelihood, more will soon be on the way. It should surprise no one that the horribly mismanaged United States Postal Service, or USPS, is trying to secure as much of this taxpayer-financed relief as it possibly can.
In the most recent aid package, the federal government extended a $10 billion line of credit to ensure USPS remains afloat for the short term. Just two weeks later, the postmaster general asked lawmakers for an additional $75 billion in federal aid that included $25 billion in emergency appropriations to offset coronavirus-related losses, $25 billion to bankroll “shovel-ready” projects to modernize the Postal Service, and another $25 billion in unrestricted borrowing from the Treasury Department, according to the Federal News Network.
Providing assistance totaling $85 billion from taxpayers to bail out USPS would only subsidize reckless behavior and kick the can down the road for much-needed postal reform.
It’s no secret that USPS is in severe financial distress and in urgent need of reform. Despite maintaining a government-sponsored monopoly over the delivery of traditional mail, USPS has lost $75 billion since 2007 and has more than $140 billion in unfunded obligations. It desperately needs to implement structural changes, or USPS will continue to rely on multibillion-dollar bailouts from taxpayers to survive.
Instead of reforming its business model, USPS and its advocates seem to be trying to shift blame to the current administration. Rep. Gerry Connolly, the chairman of the Subcommittee on Government Operations, suggested that Trump’s disapproval of an additional $25 billion USPS bailout was “hastening the demise of the Postal Service.”
To anyone who has followed the annual reports of USPS, this is laughable. The fiscal mismanagement of USPS predates the coronavirus pandemic and even Trump’s election. USPS recorded a net loss of $8.8 billion for fiscal year 2019 and had many losses of similar magnitude in the decade preceding the 2016 election.
To the contrary, in 2018, the Trump administration released a 74-page report on reforms to put the USPS on sounder financial footing — a clear attempt by Trump to save the USPS, not hasten its demise.
Blaming the Trump administration is a convenient excuse for Connolly and several other members who sent a letter to congressional leadership reminding them that “the Postal Service is vital to America’s economic recovery from this global health crisis and should no longer be left out of coronavirus relief legislation.” If the USPS wants to receive taxpayer aid during this crisis, it should make the institutional reforms that it has neglected for decades. Indeed, neglecting to solve these issues for so long has now made it all the more difficult for the institution to cope with the new extreme and difficult circumstances.
One promising call has been a recent push by large mailing organizations for a temporary price rollback of letter prices. This consideration follows the immense shock to the system that businesses endured when the USPS instituted the largest price hike in its history in early 2019. Stimulating demand for USPS’s letter service is critical to USPS’s finances, given that its letter mailings are among its most profitable products, according to agency filings.
Another important reform is reorienting USPS’s accounting transparency, which has been on the table in the form of a series of recommendations from the Treasury Department in 2018, long before the current pandemic affected the agency. The Postal Service should also consider shortening the number of days mail is delivered, changes to retiree benefits, and many other reforms included in Treasury’s reform blueprint.
The Postal Service has also been included in the Government Accountability Office’s list of high-risk programs as far back as 2001. Each year that Congress and the White House avoid comprehensive reform greatly increases the likelihood of a taxpayer-funded bailout.
Despite the intensive analysis and continued warnings, the postal leaders’ message to the Treasury has essentially remained the same: We won’t adhere to your guidelines, but we will take your money. This mantra is not only a bad precedent, it’s also short-sighted, considering Washington leaders’ collective tools and knowledge.
Saving the USPS will require thoughtful reforms and restructuring. We cannot simply send USPS tens of billions of taxpayer dollars and overlook its long history of challenges if we want to be successful.
Thomas Aiello is a policy and government affairs manager with the National Taxpayers Union, a nonprofit organization dedicated to advocating for taxpayer interests at all levels of government.
