The country is learning about the special-interest handouts in the Inflation Reduction Act.
In one particularly concerning provision, the act gives the struggling, financially irresponsible United States Postal Service $1.29 billion for the purchase of electric delivery trucks and an additional $1.71 billion to build out supporting infrastructure such as charging stations.
While the idea of electric delivery trucks sounds like a win for the environment and a proposal that might reduce operations costs in the long term, the Postal Service’s track record indicates that it is in no position to oversee such a massive overhaul of infrastructure. It is no secret that the USPS has been on the brink of financial ruin for decades, constantly seeking bailouts at the expense of the taxpayer. In 2021, its operating revenue was $77 billion, an increase of $3.9 billion despite reporting a net loss of $9.2 billion in 2020 and a net loss of nearly $100 billion since 2007. This doesn’t even take into consideration the $50 billion in bailout funding that Congress pushed through last year, which was supposed to set the Postal Service on a path of solvency as is required by law.
Top line: The Postal Service needs to get its financial house in order before it takes up an extremely costly, taxpayer-supported program. It currently lacks the proper infrastructure to support a massive switch of the postal fleet.
To complicate things further, it has already placed an order with federal contractor Oshkosh Defense for an entire fleet of next-generation delivery trucks. The current purchase order is for 165,000 New Generation Delivery Vehicle trucks, 40% of which were already slated to be electric, which was already increased from the initial order of 10% EVs. The Postal Service’s original plan had a higher potential for success: Prior to congressional meddling, it was set to roll out EV trucks in a tiered and more precise process. By increasing the number of EV trucks in the fleet all at once, the Postal Service is setting itself up for failure.
A better course of action would be to make this change over time. That would allow infrastructure to get into place and time for these never-produced-before trucks to be road-tested. In turn, this would allow for future modifications down the road with traunched orders.
Alex Milliken is a policy and government affairs manager with the National Taxpayers Union, a nonprofit group dedicated to advocating sound tax and budget policy at all levels of government.
