Congress must save the Postal Service from collapse — our economy depends on it

Greg Nash

The COVID-19 pandemic has fundamentally changed the fabric of the United States, and there is still no definitive answer of when we will see some semblance of normalcy restored. Millions of people are out of work, and millions more are working from home. Consumers are doing more of their shopping online, and small businesses are working hard to shift their operations to e-commerce platforms. Our nation’s economy is stumbling, despite years of growth under the Trump administration. But one critical institution is helping to guide the country through these trying times: the United States Postal Service (USPS).

Throughout this pandemic, USPS has delivered food, medicine, cleaning supplies and other essential goods to every doorstep in America. It’s helping families stay connected when they cannot see each other in person. It’s connecting small businesses with their customers. It is undeniable that USPS has been a lifeline for the American people during these troubled times. But now, USPS itself is in trouble.

It’s no secret that USPS has struggled financially for years. Some of these financial issues were caused by poor management, but the lion’s share of these issues are the unintended consequences of a $120 billion overpayment for employee retirement benefits between 1972 and 2006, as well as $54 billion in prefunded retirement health benefits. Most importantly, a growing population of younger people does not utilize the Postal Service.

As revenue from letter mail continues to decline and the institution faces increased emergency costs, the agency is in dire straits. The revenue boost from the USPS’s growing package delivery business isn’t even enough to keep the agency afloat.

Congress and the Trump administration have provided financial assistance to unemployed Americans, struggling small businesses, and major corporations over the course of this pandemic. Now they need to extend that relief to USPS.

The USPS enjoys broad bipartisan support among the American people and — compared to other government agencies — enjoys bipartisan support in Congress as well. Some have pointed to increasing prices on package services as a way USPS might try to save itself. However, package delivery is a growing and profitable business for the agency. In the 2019 fiscal year, packages contributed more than $8.2 billion profit to USPS’s bottom line. The Postal Regulatory Commission makes certain that package services, and all mail, pay their attributable costs.

Further, forcing USPS to increase its package prices will adversely affect America’s small businesses, consumers and economy as a whole. Because private shippers like UPS and FedEx are not bound to the same universal service obligation as USPS, they can charge higher rates for delivering to remote and rural areas, or refuse to deliver to those communities entirely. Private shippers frequently depend on the USPS to carry packages “the last mile” to their destinations when it’s not profitable for private shippers to deliver those packages themselves. Whether USPS is forced to increase its package prices or is simply allowed to collapse, small businesses, consumers and the economy will suffer.

The best solution for USPS’s current financial woes is the Postal Service Emergency Assistance Act, sponsored by Sens. Susan Collins (R-Maine) and Dianne Feinstein (D-Calif.). This responsible, bipartisan legislation would provide $25 billion to cover the agency’s financial losses caused by the COVID-19 pandemic while holding the agency accountable for its financial decisions. Before USPS could use these funds, it would need to certify in its quarterly and annual reports to the Postal Regulatory Commission that the agency needs the funds to cover pandemic-related expenses or losses. The USPS Board of Governors would also be required to submit to Congress a plan to ensure the long-term solvency of USPS.

It’s important to note that Collins and Feinstein’s bill is separate and apart from the current political wrangling between Congress and the president over mail-in voting.

The Postal Service Emergency Assistance Act is a common-sense solution to help a struggling but essential government institution, as well as the businesses and consumers that depend on it. USPS has always been a lifeline for our nation’s economy, and its role has only grown more important in the midst of the COVID-19 pandemic. The economy is already in a fragile state, and if USPS collapses, the economy could collapse with it. The House and Senate must act quickly and pass the Postal Service Emergency Assistance Act.

Jim Adams is a retired Postal Executive and served as the Chief Of Staff for three Postmaster Generals. He is the current chair of the New Hampshire State Veterans Council.

Tags Dianne Feinstein Susan Collins

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