The U.S. Postal Service (USPS) lost $3.9 billion in 2018. The agency also failed to make a $6.9 billion payment to cover its retiree health and pension benefits. Mail volume is down more than 25 percent since 2008, leaving the postman with less revenue.
So what does President Donald J. Trump propose to do to right the USPS’ ship? Certainly, he has not advocated privatizing it or selling off chunks of it. Mostly, he wants to cut its operating costs and give it increased operational and pricing flexibility.
To cut costs, Trump would:
1. Allow the USPS to deliver mail less than six days per week.
2. Require postal employees (and all government workers) to contribute a little bit more towards their retirements.
3. Encourage the USPS to outsource more of its mail processing work to private companies.
4. Trim the growth of retiree benefits costs by abolishing cost-of-living allowance increases for some retirees and basing others’ benefits upon their high five years of salary rather than their high three years.
5. Decrease the USPS’ healthcare outlays to the Federal Employee Health Benefits Program (FEHB) by basing its individual health plan premium contribution levels upon each health plan’s efficiency. (Presently, USPS contributes the same 72 percentage to each and every FEHB plan.)
To increase the agency’s revenues, the president would:
1. Permit the USPS to increase its postage prices on mail and parcels not deemed “essential.” That would include junk mail and solicitations and most packages. The USPS’ price caps, which limit postage increases to the rate of inflation, would remain for “essential services,” such as person-to-person mail and parcels, election materials and government mail, and envelopes and packages that carry prescription drugs.
2. Authorize the Postal Service to charge private delivery companies a fee to put envelopes and packages in folks’ mail boxes.
On the whole, Trump’s reform plan—if enacted in full—hopes to save around $90 billion over 10 years. The proposal is more evolutionary than revolutionary, and concentrates its efforts on cost control, which has been very difficult for the Postal Service to achieve because of various mandates.
Reforms in presidential budgets inevitably face an uphill battle. Congress is free to ignore them as it drafts its own budget and spending bills. This is doubly true for Trump’s postal reforms, which face incredible political hurdles.
Democrats control the House, and they are unlikely to embrace a plan that touches the compensation of the USPS’ unionized workforce. Even if Trump’s reforms escaped the lower chamber, they would hit a wall in the nominally Republican Senate. Regardless of party, rural senators can be counted upon to oppose a reduction in the number of days of delivery. Nor do they want their constituents to pay higher postage costs passed on by the USPS.
All this is to say, the Trump budget’s postal reforms likely are dead on arrival.