The House of Representatives took up postal reform legislation this week, a decade after Congress passed the Postal Accountability and Enhancement Act, which was supposed to shore up the U.S. Postal Service for the 21st century. It didn’t work out that way. Shortly after President George W. Bush signed the law, the economy tanked, as did mail volume.
The Great Recession is long gone, but the amount of mail sent by Americans has not recovered. The number of letters, catalogs and the like fell from 213 billion pieces per year in 2007 to 154 billion last year. The digital-media revolution has meant fewer magazines are mailed and more bills are paid online.
Worse, the mail’s composition has mostly become less profitable. First-class letters, on which the USPS makes a tidy profit, constitute much less of what’s delivered. Low-margin advertising mail is more and more of what we find in our mail boxes. The one positive trend for the USPS has been the increase in the number of packages it carries. But parcel delivery is no panacea; the volume remains modest and the revenues reaped are barely one-fifth of USPS’ total annual haul ($68 billion).
Costs, meanwhile, are tough to contain. The USPS has reduced its workforce substantially by not replacing retirees. However, collective-bargaining requirements set in law serve to drive up compensation costs. Just this past year, an arbitrator awarded raises to hundreds of thousands of postal workers.
One would hope that, with the USPS struggling financially (it has lost billions over the last decade) and facing existential crisis, Congress would step up to reinvent the agency. It has not.
Internecine postal politics have bedeviled attempts to create a Postal Service for the 21st century. Postal unions, who want to protect their members’ compensation, screamed when USPS tried to open postal counters in Staples stores. Mailers do not want to pay steeper rates, senators from rural areas insist on maintaining six-day-per-week delivery and legislators holler every time the USPS tries to close a post office or mail-sorting facility.
Certainly, there was plenty of talk at this week’s committee hearing about how bad things are for the USPS. “Ladies and gentlemen, it’s the third quarter and you’re down by 25 points, and if Tom Brady doesn’t come in, you’re bankrupt,” intoned Rep. Darrell Issa, R-Calif.
But the actual legislation being marked up is incrementalist and status-quo preserving. To cut costs, the bill would push more retired postal workers onto Medicare’s rolls, and deliver more mail to the curb, rather than to folks’ front doors. USPS’ pension burden would be lightened by changing the demographic assumptions on which it is calculated. More revenue is hoped to materialize from further increasing the price of first-class mail and letting USPS provide services and rent property to other government agencies. The Postal Service Reform Act also has some administrative reforms, like requiring the agency to appoint a “chief innovation officer” and cutting the USPS oversight board from nine members to five. (Presently, it has no sitting governors, thanks to Senate politicking last year.)
House Oversight and Government Reform Committee Chairman Jason Chaffetz, R-Utah, who has been doggedly pursuing postal reform for two years, plainly hopes to get this legislation to Trump’s desk. It will not be easy. Last year’s version—which is identical to the current bill—did not even get a vote in the House or the Senate.
But supposing that occurred, would the White House give it the thumbs-up? Trump has not said anything about postal reform. It is, however, difficult to see any compelling reasons for him to sign the Chaffetz bill into law. The USPS has enough cash to keep the lights on; the agency’s financial crisis is much more long-term (think “slow-moving train wreck”). The bill does not create a shinier, greatly improved Postal Service that will enthrall the public. The various reforms do not ensure the USPS won’t run deficits. Nor could they enable the agency to earn the profits needed to pay down its immense debts and unfunded obligations, which the Government Accountability Office pegged at $121 billion. Why would a president who prides himself on being a businessman sign such legislation?
The dispiriting truth may well be that major postal reform will not arrive until the USPS teeters on the edge of shutting down. Perhaps only in the face of an immense crisis would stakeholders and legislators be willing to enact the transformational reforms that could enable the paper-toting USPS to endure in our increasingly digital world.
Image by Roman Tiraspolsky