Debate 7/10: You’ve got mail…for now!

W ho in their wildest dreams thought Donald Trump could be a consensus builder? Certainly not me. Donald has done something truly remarkable. He has united Democrats and Republicans in Congress in a stand against his inane proposal to privatize the United States Postal Service (USPS). And, in another astonishing accomplishment not frequently seen in […]

Privatizing the U.S. Postal Service is in the air again

By David H. Landon

Q: Should the United States Postal Service be privatized?

When President Trump came into office, he initiated a review of the efficiency of various Departments of the Federal government, including the United States Postal Service. Mandated to deliver mail at affordable prices to over 150 million U.S. addresses, it holds a statutory monopoly on the delivery of first-class mail. Its current budget is approximately $65 billion annually. The current federal budget estimates that the Postal Service will have an annual operating deficit of $4.7 billion in 2018 and more than $5 billion in each subsequent year through 2027. There is agreement among both sides of the aisle that the current business model of the USPS is broken. The disagreement is in how to go about fixing it. The Trump administration is proposing to restructure the U.S. Postal Service with an eye to taking it private.

What happened to the sink the postal service into debt? When the Great Recession hit, mail volume plunged in late 2007. The reason was fairly evident. More than 90 percent of all First-class mail sent, is sent by businesses. Business cut their own budgets to the bone in order to survive the recession. That meant fewer mailings. In the years since, mail volume has not grown. It remains more than 25 percent below its peak and a high percentage of mail volume is advertising mail, which is not very profitable.

The mailing habits of the general public are changing as well. Technology and specifically email continue to cut into the number of individuals and businesses using First-class mail. Since 2007, first-class mail is down 40 percent. Since 1987, simple correspondence is down 80 percent and holiday cards are down 30 percent since 2012. The USPS has depended on its monopoly on First-class mail to make its business plan work. Clearly, that model is no longer viable without reform.

In fact, postal reform bills are afloat in both the House and Senate. These reforms do not incorporate the sweeping reforms that the Trump administration is suggesting that will privatize the postal service. Instead members of Congress from both parties seem more inclined to find cost cutting measures and incremental changes to the postal business model in hopes of making it less dependent on tax dollars to supplement its budget.

Opponents of privatization of the postal service worry about how such a dramatic change would affect both the customers and the postal workforce. They point out that 20% of American households don’t have access to the internet and without Congressional oversight of a privatized postal service that population could be at risk. The federal union representing postal workers strongly opposes any attempt to privatize the postal service. The USPS has 522,144 workers who are concerned that salaries and retirement benefits would be dramatically changed if privatization were to occur. There are at present 31,272 retail postal locations across the country.

Those who support privatization argue that only sweeping changes can save the industry from financial collapse. Privatization would likely close unprofitable locations and reduce the number of days of postal service from 6 to 5 or even 4. Those who agree with privatization argue that Congress is propping up an industry that is no longer efficient. They argue that Congress is essentially imposing a monopoly on our mail system that services fewer and fewer Americans. Pro-privatization groups point out that there are numerous examples of waste and inefficiency. The lowest-volume 4,000 post office locations in the United States only average four customers a day. They suggest that these locations remain open in small communities across the county essentially just so that we can continue receiving junk mail in our mailboxes six days a week.

How do you feel about this issue?

Q: Should the United States Postal Service be privatized?


Nay: An S.O.S. for the USPS

Postal Service and the Letter of the Law

By Marla Boone

Who in their wildest dreams thought Donald Trump could be a consensus builder? Certainly not me. Donald has done something truly remarkable. He has united Democrats and Republicans in Congress in a stand against his inane proposal to privatize the United States Postal Service (USPS). And, in another astonishing accomplishment not frequently seen in Washington, both parties’ responses were decisive and quick. Quick as in soon, as in speedy, as in rapid, as in fast, as in the bloviating was kept to a minimum while real, actual action took place. Implementing an executive order, the use of which by Barack Obama was viewed as intolerable if not bordering on treasonable, Trump created a task force to recommend a path to place the USPS on firmer financial footing and to essentially overhaul it. It’s hard to tell if the cart is in front of the horse or if we are dealing with only the rear-most portion of that horse, but Trump’s recent plan to reorganize the federal government preempted his own task force’s work, a report on which is to be released on August 10. Without waiting for the fruits of his April executive order, Trump suggested that whatever plans the task force comes up with be implemented to get the USPS in shape before it is sold to the private sector. To quote Rep. Elijah Cummings, D-MD, “Like so many other ideas that come out of this White House, President Trump’s proposal to privatize the Postal Service is disorganized, unilateral, nonsensical, and, frankly, incompetent.”

Reform of the USPS is not a new concept. The agency has been losing money steadily, largely because of a large obligation to funding its retirees’ benefits. At last count, the USPS was in the red a whopping $100 billion for health benefits alone. A bipartisan bill currently awaiting action in the House would ease the burden of those obligations by enrolling USPS retirees in Medicare. (And if it’s good enough for us…) This same bill would also expand postal services and keep the USPS as a government agency.

A spokesman for Sen. Jerry Moran, R-Kan., who co-sponsored the Senate bill, is encouraging the Trump administration to not only maintain the Postal Service but also to strengthen it. “The Postal Service can only find its way out of its current financial situation with more and better-quality service,” he said.

Other lawmakers have added their voices to the cry against privatizing the agency. Sen. Tom Carper, D-Del., called Trump’s plan “laughable except for the fact that it will hit American consumers, especially those living in rural areas, the hardest.”

Those in favor of privatization use some arguments that are scary at best and dangerous at worst. They propose reassessing the USPS’s ties with labor unions, which would allow the “new owners” more freedom to set wages and provide benefits. Brittany Hunter, writing for the Foundation for Economic Education says the USPS has no relevance in our daily lives. She contends in the digital age, ALL correspondence can be done through email, that the post office serves almost no purpose, and that it is inefficient.

The crack about inefficiency is one the Post Office has been dealing with for years. I don’t know if I have had the wonderful luck to live in an area with exceptionally good offices or if what I am used to is the norm. My experiences with the Post Office have been overwhelmingly positive. For forty-one cents (when the USPS put “Forever” stamps on the market, I bought five hundred of them) these good people are willing to pick up a letter from my house, take it into the bowels of some building where someone must try to decipher my handwriting. Once that poor soul has determined where I intend my missive to go, he or she directs it to an outgoing truck. The truck driver motors through the night to get to a clearing center where the letter is once again sorted into the correct bin. It ends up, with astonishing speed, really, on another truck that takes it to the appropriate city. Another worker with very good shoes and even better orthotics delivers that letter to the door of whomever it is I am moved to write. For forty-one cents. I wonder what Ms. Hunter is willing to do for forty-one cents. The Post Office is one of the best bargains going. Does it cost the taxpayer money? Sure it does. So do the Army, the Air Force, the Supreme Court, and the National Park Service.

I am no fan of big government. But there are simply some things a government can do better than a privately-owned company. Very recently, Trump proposed privatizing the air traffic control system. Everyone…pilots, aircraft owners, passengers, the FAA…everyone except the people who own the airlines and he who flies on a tax payer-funded, priority-handled private Boeing 747 protested this vital service going to the highest bidder.

Locked securely in her D.C. ivory tower, Ms. Hunter seems blissfully ignorant of the fact that 20% of Americans do not have access to the Internet. Likewise, privatization would probably result in the closing of the most unprofitable locations which are, naturally, those in rural areas…the very areas already underserved by reliable communication. Of course this woman also co-hosts “Beltway Banthas,” a podcast that combines Star Wars and politics. So she might want to go easy on comments about eliminating stuff that serves no purpose. Just sayin’.


Yea: End the postal monopoly

Privatization means better service and less red ink

By Ron Kozar

Monopolies are bad. The Post Office’s monopoly on the delivery of letters is no exception. We should break that government-created monopoly by privatizing the Post Office.

Europe is way ahead of us on this. Every member of the EU allows private couriers to compete with government postal services. Germany turned its postal service into a private company in 2000. France has allowed private competition since 2005. Britain privatized the Royal Mail in 2013. Each country’s privatization has been a success, enabling the courier to bring prices into line with actual costs, giving that courier an incentive to lower costs in order to offer a more competitive price, and enabling the courier to expand into related fields the way a private company might naturally do. Germany’s postal service, for example, after privatization, opened a logistics division called DHL, now familiar to all the world as a competitor of FedEx and UPS. Four of the world’s five fastest-growing postal services are privatized ones.

In the US, by contrast, the Post Office’s monopoly makes common-sense business management practically illegal. By law, the Post Office cannot charge more to deliver a letter from Dayton to Honolulu than it would charge to deliver that same letter from Dayton to Trotwood. Senators and congressmen zealously resist efforts to end Saturday delivery or to close redundant post offices in their states. One of our dumbest laws prohibits anyone but the mailman to put anything in your mailbox. (That’s why rural mailboxes are so often accompanied by separate receptacles for newspapers.) And if the Post Office were to try to open a logistics subdivision à la DHL, it would take, literally, an Act of Congress.

At least two things keep the Post Office locked in this straightjacket of pre-modern rules and political cronyism. The first of those impediments is the political imperative of Democratic officeholders, beholden to public-sector labor unions, to treat the Post Office as a jobs program, as though the purpose of the Post Office were to employ as many people as it can rather than to serve the mail-receiving public as efficiently as it can. The Post Office has been used that way, as a piggy-bank for the politically-connected, since at least 1829, when Andrew Jackson handed out jobs as postmaster to his supporters all over the country.

And the second impediment to privatization is the fact that Donald Trump seems to want it. When Trump wants something, of course, no matter what it is, half the body politic automatically opposes it. When Trump established a commission recently to consider postal privatization, everyone assumed, perhaps rightly, that it was just another move in his petty feud with Amazon’s Jeff Bezos, mega-zillionaire owner of the Trump-hating Washington Post. Trump has been heard to complain that Amazon, one of the biggest postal customers, pays too little for postage. Amazon does, in fact, have a contract enabling it, in exchange for the colossal volume of business it gives the Post Office, to pay less than you or I might pay to deliver something by mail. That, however, is as it should be. Volume discounts are a standard stratagem in every sensible business’s playbook. If Trump really hopes to stick it to Amazon by privatizing the Post Office, then the joke will be on him, for privatization would give the Post Office more discretion, not less, to make ad hoc deals to improve the bottom line.

The Post Office is right there with the Pentagon as an example of how profligately a government agency with a monopoly can squander the people’s money. In 2016, the Post Office was $5.6 billion in the red. It has lost more than $50 billion since 2007, and it carries $121 billion in unfunded liabilities, all this despite paying no taxes, being exempt from zoning laws, getting loans at sweetheart rates from the federal government, and being protected from competition by laws that prohibit anyone else to deliver a letter to your door for less than three dollars. Maybe it made sense to tolerate this insanity in the past, when paper was the only medium for getting detailed information to American households. It makes no sense today, when anything urgent or important can be emailed, when online banking makes paper bills and account-statements redundant, and where little but junk mail is left for the postal service. Today, literally half of the mail that we bend over backwards to protect and subsidize with a postal monopoly is unsolicited advertising, the paper equivalent of spam.

242 years ago last week, Thomas Jefferson said in a certain declaration that governments are instituted among men to secure rights to fundamental things like life, liberty, and the pursuit of happiness. They are not instituted to subsidize the delivery of junk mail. The time is ripe, overripe, to privatize the Post Office.

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