Postal Service Is Committed to Public Service, Not Commercial Profits
- National Association of Letter
Carriers -
At a time when the heroic workers of the U.S.
Postal Service
(USPS) are braving infection to serve the country
during an
unprecedented national crisis, it is imperative
that representatives at
all levels of the federal government have a
fundamental understanding
of the value of the postal service, the cause of
and solutions to its
current financial circumstances, and the dangers
to the U.S. economy
and rural health in the event of a USPS
insolvency.
During an April
24 press event, President Trump was asked about a
Washington Post
report that the Treasury Department wants to take
control of collective
bargaining, set pricing policy, and decide senior
executive
appointments in return for the Postal Service's
access to a $10 billion
line of credit provided by the CARES Act.
At an
April 7 daily press briefing on the pandemic,
President Trump was asked
about his Administration's opposition to financial
relief for the
Postal Service in the recently enacted CARES
Act,
as reported by Rep. Gerry Connolly (D-VA) to a DC
television station.
Congressman Connolly warned that the Postal
Service could run out of
money if action is not taken. The President's
responses warrant some
clarification about the status of the Postal
Service:
1)
Nobody is blaming the President for the current
crisis facing the
Postal Service. However, the COVID-19 pandemic
threatens its survival.
The shutdown of the American economy to fight the
COVID-19
virus has resulted in plummeting postal revenues
-- just as we have
seen in the airline and hospitality industries,
which have been given
massive relief. The USPS needs the same kind of
relief because it must
still keep delivering. Every day it delivers tens
of millions of
prescription drugs, invoices, payments,
newspapers, e-commerce
deliveries, and soon it will be needed to deliver
stimulus checks, home
virus tests and other pandemic-related goods and
information.
2) The President noted that the Postal Service
has been losing
money for years. That is true, but not due to the
pricing of its
package services. The real reason is Congress
imposed a crushing
mandate on the Postal Service back in 2006,
requiring it to prefund
decades of future health care premiums for retired
postal employees in
advance. This prefunding mandate, which no other
enterprise in the
country faces, costs an average of $5.4 billion
annually since 2007,
accounting for nearly 90 per cent of the agency's
losses. Between 2013
and 2018 it accounted for 100 per cent of the
losses. On an operational
basis, the Postal Service has been profitable for
most of the past
decade.
Senator Ron Johnson, who chairs the Senate
Homeland Security and Governmental Affairs
Committee, has called the
prefunding mandate a mistake. In February, the
House passed the USPS
Fairness Act (H.R. 2382) by an overwhelming
vote of 309-106,
including 87 Republicans voting in favour.
President Trump should urge
the Senate to pass the bipartisan Senate companion
bill (S. 2965),
introduced by Senator Steve Daines [which has not
yet occurred] and
sign it into law.
3) The President has been told by
private shippers and others that the Postal
Service underprices its
delivery services for e-commerce packages from
Amazon and other
internet companies. This is not true. By law, each
of the Postal
Service's competitive products must earn "profits"
to cover the cost of
universal service. In 2019, the USPS surplus on
package services was
$8.3 billion, an amount verified by its regulator,
the Postal
Regulatory Commission.
The President is
being fed bad information, often at the behest of
private shipping
companies with a commercial axe to grind against
the Postal Service,
which is committed to public service, not
commercial profits.
The Postal Service's shipping services are
affordable because
it has the best and most efficient last-mile
delivery network in the
country, linking 160 million households and
businesses every day of the
week. The President is right that the Postal
Service has routes
established in every nook and cranny in America,
and because it is
delivering letters, flyers, newspapers and
prescriptions to every door
every day, it can deliver packages very cost
effectively. That benefits
every American, but it also benefits the private
companies (UPS, FedEx
and Amazon) who rely on the Postal Service for
last mile delivery.
4) The President has said that the Postal Service
should raise
its prices on Package Delivery, suggesting the
rates should quadruple.
While his revenue-raising intentions might be well
placed, the result
of such a policy would more likely lead to the
loss of competitive
volume and higher prices for average Americans.
Such a scenario would
harm all American consumers and millions of small
businesses who rely
on the Post Office, especially those living and
operating in rural
states and inner cities that are not well served
by private shipping
companies, such as Amazon.
Ironically, allowing the
Postal Service to fail would essentially divert
business to Amazon and
other higher-priced private companies, none of
which can replicate the
Postal Service's universal first- and last-mile
delivery network.
Unlike private companies, the Postal Service
delivers to every home and
business at affordable prices.
It is also important
to note that the Postal Service's actual and
projected losses in volume
and revenue have nothing to do with packages,
rather the losses are
from letter mail drying up due to the economy
shutting down. Further,
the American people, who themselves are facing
financial insecurity,
need affordable package delivery, especially right
now. This is not a
time -- during a pandemic -- to significantly
raise package rates.
The pandemic is threatening the Postal Service at
a time when
its affordable, universal reach is needed more
than ever. Last week,
USPS delivered President Trump's guidelines for
social distancing to
every American household. Even as letter volume
has plummeted in recent
weeks, package deliveries have spiked as millions
of Americans,
sheltering in place to stop the spread of the
deadly COVID-19 virus,
order goods online. The Postal Service must also
be there for us when
self-administered tests and therapeutic drugs are
developed to combat
the virus.
The Postal Service, the heart of the
$1.6 trillion mailing industry that employs 7
million Americans, will
also be crucial for economic recovery. It will
deliver stimulus checks
to the tens of millions who do not have bank
accounts or who have not
given bank information to the IRS. Once the crisis
is over, the country
and its businesses will need the Postal Service to
restore the economy.
Indeed, in normal times, the USPS delivers 4
million prescriptions to
American households. A third of all household
bills are still paid
through the mail, and millions of small businesses
and household-based
merchants rely on the Postal Service for package
delivery, invoicing
and payments.
The Postal
Service is not a partisan institution; it operates
in every corner of
this country and it has hundreds of thousands of
workers -- Democrats,
Republicans and Independents -- who are committed
to serving all the
American people and their businesses. It is the
largest employer in
many states and a deeply embedded part of
virtually every American
community.
The Postal Service is by far the most
trusted and most loved federal agency. It has a 90
per cent
favourability rating, according to a recent Pew
Trust survey. Congress
and the President should take action to preserve
this national treasure.
Although the Postal Service has not required any
taxpayer
subsidies since the early 1980s, it does need
taxpayer help right now.
Congress should provide an immediate injection of
cash and commit to
cover the Postal Service's losses over the next
fiscal year,
appropriating the difference between revenues and
costs until the
crisis passes. For most of its history (from 1775,
when Benjamin
Franklin was Postmaster General, all the way up to
1970), the Postal
Service was funded by taxpayers and postage. A
temporary return to this
dual-funding structure is vitally needed right
now. It would be a
tragedy to let this pandemic kill such an
important and essential
American institution.
It would also be an insult to
the 600 postal employees who have already
contracted the virus while
performing their essential duties -- and to the
6,000 who are currently
quarantined and those who have lost their lives to
the COVID-19 virus.
We urge President Trump and the entire Congress to
work together on
commonsense policies to ensure the continued
operations of the U.S.
Postal Service through this crisis.
This article was published in
Volume 50 Number 34 - September 12, 2020
Article Link:
Postal Service Is Committed to Public Service, Not Commercial Profits - National Association of Letter
Carriers
Website: www.cpcml.ca
Email: editor@cpcml.ca
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