While we are trying to survive the Trump pandemic, there may be a major casualty: the United States Postal Service. Via Fortune:
...It delivers about 1 million lifesaving medications each year and serves as the only delivery link to Americans living in rural areas. Working with other delivery services like UPS, the agency supports $1.7 trillion in sales and 7.3 million private sector workers year, and this year will prove essential to delivering the 2020 Census to citizens as well as any vote-by-mail initiatives. The USPS is the federal government’s most favorably viewed agency, with an approval rating of 90%.
Yet once again, the USPS is in crisis mode.
With a negative net worth of $65 billion and an additional $140 billion in unfunded liabilities, the USPS originally expected to run out of liquidity by 2021 without intervention. That has accelerated rapidly because of COVID-19. Fewer people and businesses are sending mail because of the outbreak, which could hasten the decline of the Postal Service and close its doors as early as June, officials warned.
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What are these unfunded liabilities you ask? This 2015 post from the USPS Office of the Inspector General explains the consequences of a 2006 law requiring the Post Office to fully fund future employee pension needs today.
...What if your credit card company told you: “You will charge a million dollars on your credit card during your life; please enclose the million dollars in your next bill payment. It’s the responsible thing to do.” Doesn’t seem quite right, does it?
Well, that’s what the U.S. Postal Service’s requirement to prefund its long-term pension and healthcare liabilities is like. The Postal Service is required to pay the full estimate of its liabilities, currently estimated at nearly $404 billion, even as that estimate moves around and is based on assumptions that are highly uncertain and can frequently change over the life of the liability. Our recent white paper, Considerations in Structuring Estimated Liabilities, evaluates these assumptions and other considerations and shows the Postal Service is closer to being fully funded, or potentially overfunded, when certain assumptions are reasonably adjusted or considered.
A report from the NY Times on a Post Office rescue package in 2012 spells it out:
Perhaps most significant, the bill would restructure the payments the agency makes into a health benefits fund for future retirees. Under a 2006 law, the agency has to pay $5.5 billion annually into the fund, which the Postal Service said had added $20 billion in debt to its balance sheet since 2007.
The bill would lower the amount of the prepayments and allow the agency to stretch them out over 40 years. The Postal Service is the only federal agency that prepays its future retiree health obligations.
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H.R.6407 - Postal Accountability and Enhancement Act was introduced by Representative Tom Davis, (In Congress 1995 - 2008, R VA-11) in 2006 and rushed through in a lame duck session. While there is disagreement about what the act actually requires the Post Office to fund, it is widely seen as part of the GOP long term goal to make the USPS uncompetitive and unprofitable to justify privatizing mail service.
...In reality, most of the post’s wounds are politically inflicted. In the early 1970s, Congress passed legislation that shoehorned the agency into a convoluted half-public, half-corporate governing structure to make it operate more as a business. And in 2006, Congress required that the Postal Service pre-fund its health benefit obligations at least fifty years into the future. This rule has accounted for nearly 90 percent of the post’s red ink since.
...No other agency or department is subject to this requirement. So why is the Postal Service? The George W. Bush administration demanded its inclusion and used the savings it generated to try to balance the budget. Dutiful Republicans said it was necessary to ensure that the post doesn’t generate a “huge unfunded liability” that would require a bailout from the government, an absurd posture they still maintain. But the requirement’s main upshot has been to plunge the Postal Service into a perpetual fiscal crisis that in turn justifies further attacks from the right. Full privatization is still neither politically nor logistically feasible, but that won’t stop Republicans and their allies from trying.
This is part of the long running GOP war on Government. (Thanks Reagan! Thanks Newt! Thanks Norquist!) While Americans are out of work and trapped at home during the pandemic — which also has roots in the ‘starve the beast’ mentality of the GOP — the need for the Post Office is, if anything, even more critical. The Coronavirus is hitting the USPS like everyone else.
Like hospitals, grocery stores, and other essential businesses, post offices have remained open despite many businesses closing as the coronavirus continues to spread. As of Tuesday morning, more than 46,000 cases had been identified in the US.
At least 20 postal workers had fallen sick by Friday, The New York Times reported this week. The head of the National Postal Mail Handlers Union told the paper that workers had gotten sick in Miami, New York City, Seattle, Portland, and other cities.
That's a small number of the agency's roughly 630,000 employees, but it underscores the outbreak's effects on several industries.
I ventured out to mail a package yesterday. There was a sheet of clear plastic from the ceiling down to just above the service counter, all the way across. Tables had been placed in front of the counter to enforce distancing. The clerks behind the counter were wearing gloves and masks.
Reps. Carolyn Maloney (D NY-12) and Gerry Connolly (D VA-11) introduced a bill that would have provided $25 billion in emergency funding for the Postal Service while eliminating the agency's debt and requiring it to prioritize medical deliveries, but the final bill changed that to just a $10 billion loan from the Treasury with no debt elimination.
Connolly reports Trump personally objected to any assistance for the Post Office. (Video at the link.)
It’s not just about money or ideology either; Republicans do NOT want voting by mail because they know they’d lose if we made voting easier. Trump openly admitted it, and he’s not alone. Trump and the Republicans are doing everything they can to make voting harder, including voting by mail.
Republicans think we can live without the Post Office — and that private industry could do the job. The reality is something different.
The USPS handles 47 percent of the world’s mail, delivering nearly 150 billion mail pieces annually. It delivers more in sixteen days than UPS and FedEx, combined, ship in a year. The agency has roughly half a million career employees spread out across almost 31,000 locations. Post offices are tucked into every state, across far-flung Native American reservations, and in remote protectorates. If it were a private business, the post would rank around fortieth on the Fortune 500. And you can send a letter from coast to coast for two quarters and a nickel—less than the cost of a candy bar.
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Mail has dropped off since the Trump pandemic hit, but what mail is going through is a life line now that people are isolating. The United States Postal Service is more important than ever.
The Trump pandemic has done this much. It has not only made obvious how corrupt and incompetent the administration is, (and we’re talking about major systemic corruption), it is also revealing how much damage Republicans and their war on government have been doing to the country for decades. The looting is becoming more blatant. (We’d be living in a very different country if someone had drowned Grover Norquist in a bathtub years ago...)
Contact your Congress Critters and let them know: Now is the time to save the Post Office. For some people it could make the difference between life and death, and the USPS just might help save our country from Trump and the party of death.