USPS Is in Real Trouble

For years, I’ve been discussing how Congress forced the US Postal Service (USPS) to ‘pre-fund’ 75 years of pension obligations over a period of ten years, something no other delivery company is forced to do. That Congressional requirement, along with massive overcharges in contributions to federal pension funds in order to skirt deficit reduction limits, meant USPS ran deficits–large ones–as opposed to building up a surplus.

Now that postal deliveries are off by a large amount due to the pandemic (and revenues have plunged), USPS predicts that it’s going to be non-functional in a few months. This delights Republicans who have been trying to privatize USPS for years, and who now sense a real opportunity. Earlier this year, B.C. (before COVID-19), the House passed a bill to remove the pre-funding requirement, but the Republican-led Senate, like they so often do, refused to take up the bill.

At this point, it’s tempting to do the usual “Republicans bad! BOO! HISS!” thing. Except the pre-funding requirement was bipartisan.

In 2006, it passed the Senate on a voice vote, which requires unanimous consent (the procedure is used for convenience for obvious things, but also to prevent a written record of votes). During the Obama administration, there was a period where Democrats held a Senate supermajority and control of the House–they could have removed the pre-funding limitation. They chose not to do so.

In fact, Peter Orszag, who was Obama’s OMB director for the first two years of his presidency, in 2012, wrote an op-ed calling for the privatization of USPS. In 2014, Obama offered a half-assed proposal that was dead on arrival anyway.

This is why Sanders supporters and the ‘Bernie-curious’ are right to be angry with Democrats: when they have the opportunity to fix simple things, they don’t do anything; they could have passed the House bill from 2020 in 2009–they didn’t. Now we might lose the Postal Service (Got Vote by Mail?).

Related: This is why Obama’s recent attempts to cast himself as a left-ish type forced to go along with conservative crap ring hollow: he didn’t need to appoint a privatization advocate like Orszag to OMB. He could have pushed for this (along with a lot of other things). He–along with Congressional Democrats–failed to do so.

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1 Response to USPS Is in Real Trouble

  1. alwayscurious says:

    Part of the problem is also that USPS is not allowed to raise the rates on packages which are more expensive to handle (https://fas.org/sgp/crs/misc/R44603.pdf). USPS raising the rates would hurt FedEx and UPS which habitually dump packages to MiddleofNowheresville, USA into the USPS system. If USPS raised its rates, it would become competitive against these services and force them to increase rates or expand their own coverage. Both companies have a vested interest in keeping USPS alive (but on life support) in order to keep their own costs down. Ultimately, USPS will be kept alive in exchange for much higher rates on first class postage.

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