An inside look at the USPS drama — and a solution for how to fix it
Aug. 21, 2020
Alan Kessler laughed this calendar week when I called to say that all this talk almost the Postal Service had me thinking about him.
Kessler—a high-powered Philly litigator and a connected political fundraiser who has long arranged big sums for the likes of Ed Rendell, the Clintons and Al Gore—served on the U.Due south. Mail service board of governors for 11 years, starting in 2000, later on being appointed tardily in Beak Clinton'south 2d term. In 2008 and 2009, he served equally Board Chair.
Then…why the laughter? "It'south funny; it's such an overlooked agency, in over a decade on the Lath, I had peradventure three conversations about information technology," Kessler says. "Well, yours is the tertiary media call I've gotten on it, just this morning."
He's right; the Mail has rarely been front and middle in our political zeitgeist, despite the fact that, upon its founding, the nation's fathers accounted information technology essential to a functioning Democracy—for a time, even requiring information technology to deliver newspapers to citizens.
Today, most of united states get our mail and think nothing of the bureaucratic behemoth behind information technology. And a behemoth it is, generating virtually $76 billion in annual sales—more than FedEx or UPS. Simply it loses billions of dollars a year, including $2 billion in the about recently closed fiscal quarter.
How the Postal service Got to This Identify
Nosotros'll get to some of the reasons why, considering they inform the current controversy. Just first, let'south take a step back.
Yes, there's a tsunami of media and political hyperventilating about Donald Trump's war on the Postal Service, in function because of the president's habit to saying the tranquility part aloud. For someone who has told nearly xx,000 lies as president, Donald Trump is pathologically honest when it comes to the motivations behind his diabolically self-centered maneuverings.
So let's take Trump at his give-and-take. He would like to employ the power of his function to impede postal service-in voting and thereby increment his chances of winning reelection. He'south said as much. But at present allow'south go dorsum and look at how the Mail got to this place, and the narrative that emerges is far more complex than just Trump malfeasance.
Behind all the blaring headlines, l'affaire Postal Service is a story well-nigh how short-sighted politics, shoddy media coverage and borough ignorance all collide to sow defoliation in the public square.
Yeah, this is yet another story that illustrates how good Trump is at running brutal over bipartisan norms. But, really, behind all the clarion headlines, l'affaire Postal Service is a story well-nigh how brusk-sighted politics, shoddy media coverage and civic ignorance all collide to sow confusion in the public square.
Let's walk through the background.
The U.S. Postal Service was a branch of the federal government—the postmaster general had a seat in the president'due south cabinet—until the 1970s, when it adopted its current hybrid, public-individual model. Information technology is run past a ix-person Board, appointed past the president and confirmed by the Senate, that, like any private Board, approves majuscule investments; establishes long-term strategies; sets mail service prices (with the blessing of the Postal Rate Commission); and—critically—strikes labor agreements with a workforce that consists of vii dissimilar unions.
The Post is not funded past the federal regime. Given its history of precarious finances, it has received loans from the Treasury Department, but it relies on postage rates to exist self-sustaining. That hasn't worked out as well well in the internet age. The advent of email and the rise of contest from the likes of FedEx and UPS have resulted in a string of fiscal crises.
Add together to that the fact that, in 2006, Congress, in its short-sighted wisdom, mandated that the Postal Service pre-fund its wellness care obligations, to the tune of putting aside some $eleven billion a yr. To be clear: This is something private companies have to do when it comes to pension obligations, so companies can keep to pay retirees even when the business goes under. But corporate health care benefits are paid as they are incurred—everywhere, that is, but in the highly unionized Mail service.
"In my nearly 12 years on the Board, I can't remember a twelvemonth without a loss of at least $2 or $iii billion," Kessler says. "We were e'er competing with 1 hand tied behind our back. FedEx could say, 'We won't deliver to the base of the Grand Coulee, unless you lot pay a premium.' Well, the Postal Service has to deliver everywhere. When nosotros tried to do things that would make united states competitive, we'd become shot down by Congress. Nosotros looked at selling advertising on Postal [Service] trucks and buildings, and that went nowhere. Catastrophe Saturday commitment would have saved $3.5 billion, but that was blocked by Senator Susan Collins, because Maine had companies that were in the catalogue business organization and they were dependent on Sat delivery."
Here's the tough role about the "Trump's War on the Post Office" scandal equally it is currently blaring out on cable Idiot box. Information technology'southward entirely possible that Louis DeJoy, the Trump donor turned postmaster general, may accept been seeking to aid Trump'due south political fortunes with some of the moves he's now backing away from, in accelerate of his testimony earlier the Senate. But that's not at all articulate, especially given that he's only been in his position since June and some of the most troubling policies—like the removal of post-sorting machines—pre-engagement his arrival. Just at least some of the steps taken past DeJoy and the board of governors to rein in costs—does Laguna Embankment, California, really need three post offices?—are necessary in trying to right the send of a tanker that loses billions of dollars a yr.
"Moving some of that postal service-sorting equipment out, I take no idea what that'due south about," Kessler says. "But cutting overtime in an organization with such serious fiscal issues? Anyone leading a business that's losing billions of dollars would exist doing that."
But, in the media narrative, Trump's rhetoric colors every movement the postmaster full general or lath of governors makes. And so when highly respected Deputy Postmaster General David C. Williams resigned in May, reportedly in protest over some of these very changes, it was a signal to some that, as with so many other aspects of the federal government—Ukrainian policy comes to listen—the president was highjacking governance for his personal benefit.
That'due south why former Board members, like George W. Bush-appointed Carolyn Lewis, blasted DeJoy this week in the Texas Tribune, pointing out that the Board and DeJoy "are very new and have none of the institutional noesis that is usually at that place…Yet they seem to be rushing alee to make changes before having time to fully empathise the impact of those changes on all the stakeholders and there are many: employees, mailers, Congress and the American public…I do not know for certain the motivation of the [postmaster full general] and the governors, but their deportment are certainly inviting questions, and legitimately so."
The Real Predicate for Today's Imbroglio
Kessler cautions me nigh throwing the give-and-take "reform" effectually when talking about the Mail service, because that has long been code for privatizing the agency; politically, that's a non-starter for Democrats who depend upon union support, and, by introducing the vicissitudes of marketplace pricing to our mail system, privatizing the postal system would introduce a hierarchy of winners and losers based on geography to what has always been an egalitarian system.
But when a unionized entity consistently loses billions of dollars, some talk almost privatization is inevitable. That fault line gets united states to the existent predicate for today's imbroglio.
"In my almost 12 years on the Board, I tin't recall a year without a loss of at least $2 or $3 billion," Kessler says. "We were always competing with one hand tied behind our dorsum."
In 2014, amid falling revenues and calls for cuts—closing branches, looking again at catastrophe Saturday delivery—President Obama put forth a slate of candidates for the lath of governors: three Democrats and 2 Republicans, in keeping with the longstanding norm that the political party that holds the White House gets a majority—five seats—on the Board.
Among Obama's nominees was the most excellent D. Michael Bennett, an African-American lawyer with existent ideas about how to make the Postal service neat again, equally profiled by Jason Johnson this calendar week on The Grio. But, of all people, Bernie Sanders, conspiring with Republican Senate Bulk Leader Mitch McConnell, blocked all five Obama nominees, for fear that the two Republicans would back up privatization, and effectively froze any subsequent nominations.
And so the Board withered and died, as Board member terms expired with no replacements offered up.
By Dec of 2016—mind yous, this is before Trump took office—Sanders' 2-year-old blockade had left the board of governors with no members. Ever since, Trump—who has long mused publicly about upping postal rates to harm his perceived archenemy Jeff Bezos—has methodically remade the Board, with nary a peep of opposition from the Democrats.
Currently, there are two Democrats on the Board and five Trump-appointed Republicans—all of whom, according to this CNBC study have some tie, financial or otherwise, either to Trump or to the president'south Treasury Department.
This in no mode is a defense of Donald Trump, who has brazenly committed to using the power of his office to help his political fortunes. But where were Bernie and the Democrats? The final of Trump's nominees were canonical by the Senate 89-0. Turns out, Bernie was tougher on Obama than he was on Trump. Blinded past fealty to union support amidst billion-dollar losses, Bernie knee-capped Obama and his African-American lath of governors reform nominee D. Michael Bennett, simply as Congress pandered past requiring the Postal Service to prepay its wellness care costs for 75 years, something no other governmental agency is mandated to do.
What Would Reform Look Like?
It's become something of a mantra from me, I know: reform, non ideology. Simply there is no question that the Postal service is in demand of serious reform. DeJoy is the first outsider Postmaster Full general in history and, reverse to what has been floated, as the former CEO of a major logistics company, he is qualified to helm a Mail turnaround. His testimony today in the Senate and Mon before the Firm volition no uncertainty lay out the scope of the problem.
It will exist hard for DeJoy to come off equally a credible reformer, nevertheless, because of what we know most Trump's contemptuous motives. So, given that lack of trust and the frenzied media coverage, how exercise we know that post-in voting won't lead to disenfranchisement? How volition we know whether our votes volition be counted if we drop our ballots into a mailbox?
Kessler says information technology's a proficient sign that, in anticipation of his testimony, DeJoy has signaled a willingness to suspend the reforms that have been almost criticized for delaying post commitment. And former Board fellow member Lewis agrees with one-time Postal Service regulator Ruth Goldway, who counseled "don't panic" in The New York Times.
Both say that the primal will be whether DeJoy commits to handling all mail-in ballots as outset-class, rather than nonprofit-rate mail service. If showtime-course, ballots should take only two or three days to go to election boards, compared to 7 to x days at the nonprofit rate of postage. "He needs to clarify that it is first-grade standards," Lewis told the Texas Tribune. "If information technology is non first-class postal service standards, that'due south non good enough."
The media story volition proceed to centre on whether Trump is manipulating the Postal Service for his own ends, as the hearings and the lawsuit being led by our ain Josh Shapiro will bear out. But we besides need some solutions to the systemic problem of the Postal Service, and it just may be that DeJoy's cost-cutting is more about that than it is about doing Trump's political bidding. Which begs the question: Are the cost-cutting reforms DeJoy will no doubt lay out the right ones, or are there ways for the Postal service to actually grow its way to sustainability?
Senator Kirsten Gillibrand, for example, has introduced the Postal Banking Human activity, which would return the post office to its Great Depression roots, when it offered depression-cost banking services to poor families.
Her bill finer turns the Mail's 30,000-plus locations into nonprofit banks in depression-income urban neighborhoods and rural towns, offering low-toll checking and savings accounts and low-involvement loans to help cover life's necessities.
Gillibrand projects $9 billion in Postal Service banking revenue a year. In addition, she would repeal the 2006 law that mandated the pre-funding of those health intendance costs, something Trump's ain 2022 Postal Job Force identified every bit the major roadblock between the Mail service and profitability.
Gillibrand's bill takes on many sacred cows, established banks and a strong spousal relationship amongst them. She has said that her bill is dead on arrival, at least until a new president and newly heavily Democratic Congress gain power.
As Sanders' 2022 machinations make patently, still, Democrats can impede progress but as enthusiastically as Republicans. But at to the lowest degree Gillibrand's is a serious proposal that seeks to fix a policy problem.
For all the attention the Postal Organization is at present suddenly getting, we're however hearing a lot more than proper name-calling than we are policy fixes.
It's election season in Philadelphia. Are you all set to vote?
- Cheque your voter registration in PA
- Register to vote in PA
- Find your polling identify and other post-registration facts
- Request a postal service-in ballots for the 2022 election
- Bank check out who's running and what are the election questions
Source: https://thephiladelphiacitizen.org/postal-service-problems-solutions/
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