Darrell Berkheimer: Postal Service needs reforms, not billions in bailout
As nationwide protests, racial injustice, coronavirus issues and wrangling over the re-opening of our economy has drawn most of our attention during the past couple weeks, Democrats have been pushing a $25 billion unrestricted bailout for our U.S. Postal Service.
That would be a monumental waste of money — if needed reforms are not initiated.
I’m sure readers are aware that I am not a fan of the current administration in Washington. But the executive task force on the postal system ordered by President Donald Trump was sorely needed. Yet its recommendations — issued 18 months ago — apparently are being ignored.
The Postal Service has been losing, and will continue to needlessly lose, billions of dollars unless reforms are adopted.
Between fiscal 2007 and fiscal 2018, the Postal Service losses totaled $69 billion. And the USPS forecast is for continued losses totaling tens of billions of dollars over the next decade.
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That should not be a surprise. Haven’t we been witnessing tremendous mail service declines in recent decades? Haven’t we noticed how our personal tech gadgets, the United Parcel Service and Fed-Ex have syphoned away large portions of historic mail services.
Mail business has dropped precipitously while package business is up sharply. One of the reasons is because UPS and Fed-Ex can make a profit by paying the Postal Service to deliver many packages — for cheaper than those services charge.
So the Postal Service is projecting a $13 billion shortfall this year alone because of the pandemic — with mail volume down about 30 percent since the virus forced businesses to scale back advertisements, catalogues and other mail. A jump in package deliveries to homebound customers has not fully compensated for those losses.
As a result, Postmaster General Megan Brennan in April asked lawmakers for an $89 billion bailout that would include funding to make up for losses because of the pandemic, new money for modernization and $39 billion in restructured debt.
In pushing for an immediate, unrestricted $25 billion bailout, Democrats in the House are saying the Postal Service will be out of money by the end of September. But with the $10 billion Congress approved in the CARES act, the Postal Service in a May legal filing said it expects to have sufficient funds to continue operating through at least May of 2021.
That gives Congress nearly a full year to enact, and enforce, needed reforms.
Those reforms were detailed by Trump’s Postal Task Force on Dec. 4, 2018. Of the many recommendations listed, I consider four of them to be the most significant. They are:
Specify the system’s “essential postal services;”
Establish market-based pricing;
Pursue cost-cutting strategies, and
Explore new services.
In calling the Postal Service a “joke,” President Trump has demanded price increases as high as quadruple current rates for packages, or he will refuse to sign any bailout bill. Raising rates that high, of course, would be outrageous, and perhaps disastrous. But some increases are needed. Why should UPS, Fed-Ex and Amazon be able to make profits — especially on more rural deliveries — by paying postal rates below market-based costs?
A list of “essential services” by the postal system should include residential and rural deliveries, federal franking privileges and mailing of election ballots.
And the postal service must be stabilized because so many rural, residential and small businesses rely on the mail for regular transactions. Older Americans, especially, rely on mail service for medications and other essentials. But the volume of those transactions and deliveries has declined significantly in recent decades.
Now, many Americans, perhaps the majority, are following stay-at-home directives — relying on mail delivery of prescription drugs, food and other necessities. Tax refunds, stimulus checks also arrive through the mail. So do election ballots.
Rural areas would be particularly hard hit if the Postal Service ever goes bust.
But Congress needs to switch tactics — from bailout to reforms.
In decades past, people relied on the mail for receiving and paying bills. Today many of us are paperless, receiving invoices and monthly reports by email. And we also pay bills in a paperless manner — with computer, phone, and automatic withdrawal.
We send messages by email instead of postcards; ecards instead of greeting cards. We’ll call or text with cell phones and computers — even maintain visual contact with Skype and Zoom.
But each of these communication methods has resulted in additional declines in mail service – most particularly residential service. And the exceptions to these modern methods are not enough to maintain daily residential mail service.
Yes, we still receive a fair amount of direct mail from corporations and businesses. And I believe those businesses should be paying enough to cover the costs of that service. Their bulk mailings require just as much handling at the delivery end as all other items.
These are the reasons why I believe the Postal Service should be reducing costly home deliveries to only three days weekly.
Ending Saturday delivery has been proposed for many years. But that doesn’t go far enough, because we simply don’t need Monday through Friday delivery, either. Few people actually visit their mail boxes daily.
Many businesses use a postal box number, allowing them to collect their mail daily. And those businesses that receive large volumes of mail usually send an employee to get their mail daily. Many of us have even had the experience of doing that for our employers.
Think about it. Do we really need home delivery more than three times weekly? Isn’t more than that a very costly waste of manpower — and tax money that could be better directed to other needed services?
In addition, there are other ways the Postal Service could innovate to meet both today’s needs, and others in the future. Other countries have postal workers check in on the elderly, making it easier for seniors to remain in their own home.
Postal trucks could also be equipped with monitors to gather data on everything from potholes to pollution. And some Congress members have cited opportunities to build on postal banking services.
Each of those services should be explored. It’s time to end the enormous money pit our postal system has created.
Darrell Berkheimer, who lives in Grass Valley, is a frequent contributor to The Union. He has seven books available through Amazon. His sixth, Essays from The Golden Throne, includes 60 columns published by The Union, plus a dozen western travel and photo essays. Contact him at email@example.com.
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