Don’t Shrink the US Postal Service; Expand It
Last week we wrote about rebuilding the Commons as an antidote to the march toward greater privatization and top-down control of every aspect of our lives from public spaces to education, prisons, health care, resources and water to the internet, knowledge and creative entities. The false mantra that “private is more efficient” has been drilled into the heads of Americans despite the fact that most private institutions require public support in the form of public infrastructure, services or subsidies.
In fact, David Morris of the Institute for Local Self Reliance wrote that “Unbeknownst to most of us, the competition between public and private sectors [like golf] is also handicapped. But contrary to the popular wisdom, it is the private sector that often cannot compete without being given more strokes.”
The Postal Service is perhaps the best example that public institutions are in reality more efficient than private ones. Although since the 1980s the Postal Service has been under an attack so severe that private corporations would not survive it, the Postal Service remains financially solvent without public subsidies and while continuing to offer services at low rates.
In addition, the Postal Service, because it is public, has a mandate to serve all of the public no matter where they are. Unlike private corporations that operate only in areas where they can turn a profit, the Postal Service serves everyone. In some rural and low-income urban areas, the post office is the only institution that connects those communities to services and to the rest of the world.
The Postal Service is one of our oldest institutions and is the only one explicitly mentioned in the Constitution, in Article 1, section 8, the Postal Clause. It has a rich history from the early Pony Express to the more than 1,000 post offices built during the New Deal era to create jobs that included hiring artists to paint murals depicting American history.
And the Postal Service is one of our most popular institutions. A recent Pew Opinion Poll found that the Postal Service has an 83 percent approval rating, higher than “President Obama, either major party, the Catholic Church or the NRA.” It is this love for the Postal Service that is responsible in part for its continued existence. Community members are teaming up with postal workers to prevent cutbacks and closures.
Rather than shrinking the Postal Service, there are sound arguments to expand it to offer new services, from voting by mail to financial services to creating a Postal Savings Bank that could provide capital for infrastructure projects. The Japan Post Bank, a savings institution, is the largest holder of deposits in the world and played a big role in the rebuilding of Japan after World War II.
Not Dead Yet
If you listen to the news, you may believe that the US Postal Service (USPS) is a dying institution. The manufactured “fiscal crisis” has been used as an excuse to make the public believe that cuts must be made to the Postal Service. These cuts are part of an ideological agenda to dismantle the Postal Service. They have nothing to do with reality.
To begin with, the USPS does not receive any subsidies from the federal government. So it does not contribute in any way to the federal deficit. Your tax dollars do not go into the Postal Service. For most of its history, the USPS was funded through taxes and income, but the Omnibus Budget Reconciliation Act of 1981 required that the USPS be completely self-funding without federal subsidies. According to a report by the Congressional Budget Office in 1984 on ways to reduce any indirect federal subsidies to the USPS as well, the intention was “that the service operate as a self-supporting enterprise.”
Despite this change, the USPS continued to function and remain solvent. The next attack came in 2006, when Congress passed a bill that placed the USPS in an impossible situation. The bill mandated that the USPS pre-fund 75 years of retirement funds, including health benefits, within a ten-year period and at the same time restricted the rates that the USPS could charge. This amounts to $5.5 billion that must be put aside in that period. This is unheard of. No other business or institution is required to pre-fund retiree benefits that far in advance, and only aboutone-third of Fortune 1000 businesses engage in any pre-funding at all – while the USPS is paying for the health care and retirement benefits of postal workers not yet born.
This placed postal workers on the defense in the negotiation of contracts. The mandate and the economic recession in the following years placed a tremendous burden on the USPS to make internal cuts. Added to that was the mentality by mailing industry executives to force postal employees to “share some of the sacrifices.” Pressure was placed on part-time postal workers to quit by assigning them to offices far from their homes. Overall, 150,000 solid postal service jobs have been cut since 2006.
The USPS is the second-largest employer in the United States, after Walmart. Currently there are 550,000 career and 100,000 non-career employees. At its peak, there were nearly 900,000 employees. If the pre-funding mandate did not exist, the USPS would have been able to invest in expanding its services and creating more jobs with living wages and benefits. And the USPS also would have been able to modernize and to move in a more sustainable direction by transitioning to a green fleet of vehicles.
One of the rationales for mandating pre-funding of benefits was a concern that the internet would reduce the need for postal services. The reality is that internet shopping, e-commerce, has increased income instead. The use of the internet for shopping is increasing globally. In the US, it has been rising steadily by around 15 percent each year. E-commerce is dependent on the USPS because it is the only entity that has the physical infrastructure in place to deliver to every home and business in the country.
It is this extensive network that makes the USPS so valuable in a number of ways. In some communities, the local post office is the only connection with the outside world. The local post office provides services that are not otherwise available, such as money orders in places where there are no banks and copying in places where there are no office stores. Through the Carrier Alert program, postal carriers even look after members of the community. Disabled and elderly residents can register with the program, and their local postal carrier will check in with them six days a week. If a problem is noticed, carriers can connect them to local service agencies for help.
Postal Service on the Defense
Attacks on the USPS are ongoing, but so are efforts to preserve it. Unfortunately, President Obama is not a friend to the Postal Service. He has repeatedly backed ending Saturday delivery, an unnecessary reduction in service, as part of the federal budget reduction plan. This would result in a loss of 80,000 good jobs without affecting the federal budget because the USPS is self-funded. The savings from ending Saturday delivery would not be significant for the USPS but would hurt the elderly and businesses that rely on six days of delivery for goods and medications.
Companion bills in Congress have been put forth by House Oversight and Government Reform Committee Chairman Darrell Issa (R-California) and Sens. Tom Carper (D-Delaware) and Tom Coburn (R-Oklahoma) that would end Saturday delivery and door-to-door delivery. Instead, there would be mail drop points, and residents would be required to build cluster mailboxes at the delivery points. Despite having only two sponsors, the House version was passed out of committee in 2013.
Moving to decentralized delivery by using cluster boxes would increase mail theft and vandalism of the mailboxes, would make it more difficult for disabled and elderly residents to get their mail, and would end the Carrier Alert program. It also would hurt e-commerce. Even private delivery companies like FedEx depend on the USPS for 40 percent of their ground deliveries.
Some view these proposals as part of an effort to destroy the Postal Service for corporate interests who want to take it over. Reducing services will undermine the popularity of the Postal Service and allow its opponents to point to its failures (failures they will create). At the same time the pensions and health care programs, pre-paid for 75 years, will create a fattened calf for the slaughter so businesses that take it over will profit tremendously.
Bills that support the USPS, including the Postal Service Modernization Act, also exist in Congress; and although they have much more support from members of Congress and the public, they are not moving. Representative Peter DeFazio (D-Oregon) and Sen. Bernie Sanders (I-Vermont) have companion bills. DeFazio’s version has 160 co-sponsors and Sanders has 30 co-sponsors. The bills would preserve Saturday delivery, repeal the pre-funding mandate, and authorize the USPS to offer new services, among other things.
The National Association of Letter Carriers has a campaign, called Delivering for America, to build public support for these bills. The community group Community and Postal Workers United is focused on protecting local post offices from being closed. This summer, an active occupation in Berkeley, California, tried for more than a month to prevent the sale of its beautiful historic post office.
The postmaster general has identified hundreds of post offices that are up for sale. These properties were turned over to a private realtor firm, CBRE, to handle the sales. Sen. Dianne Feinstein’s husband, Richard Blum, is the chairman of CBRE, and the couple stands to earn tens of millions of dollars from the sales, which include properties that have historic architectural value and contain American art.
Time to go on the Offense
Public support for the USPS is the primary reason that it has been preserved. This is still a huge battle. More than taking a defensive position, it is important to go on the offense and demand not only that the attack on the USPS end but that the services offered by the USPS are expanded. There are a number of exciting possibilities.
According to Jim Sauber of the National Association of Letter Carriers, the USPS has more storefront facilities nationwide than five or six fast food chains and Starbucks combined. Post offices exist in every community, even in places that have been abandoned by private companies and banks because they are rural or do not have enough commercial business. It is in these communities in particular that the local post office serves as a lifeline.
Some have suggested that the post office could provide notary services and fishing and hunting licenses. Other possibilities include voting and financial services. There are other ideas too. The post office can function as a central point for any number of government services.
Voting by mail is one service that could address many of the issues with voter suppression, especially if voter registration at the post office is included. It would prevent problems with long lines at polling places, insufficient numbers of voting machines and limitations due to polling place hours. Voting by mail also would limit efforts to prevent people from voting by telling them the wrong voting day or wrong address for polling stations. Opponents of voting by mail are concerned that voting by mail could lead to voter intimidation by bosses and spouses or the buying of votes. Supporters say that voting by mail gives people more time to research candidates and ballot initiatives and to educate children about the process.
Oregon is the first state to go completely to voting by mail. The effort started with some local elections in 1981. And it was so popular that by 1998 the residents voted, with 70 percent support, to vote by mail for all elections. More people have registered to vote in Oregon as a result and voter participation is much higher than the national average, more than 60 percent for all elections. In the 2004 presidential election, 87 percent of those registered voted. Voters receive their ballots two weeks before Election Day, and they have up until 8 PM on Election Day to mail their ballots or they can drop them off in special ballot post boxes.
Other advantages of voting by mail are that it is 30 percent less expensive because the polling staff does not need to be recruited and trained. Tracking of the votes as they come in also allows more targeted get-out-the-vote efforts. And voting by mail also creates a reliable paper trail so that recounts can be conducted in a contested election.
Another important possibility for post offices is to provide financial services and even a small-scale savings bank. The FDIC conducted a study based on 2011 census data that found that 28.3 percent of households in the US do not have a bank account or are “underbanked,” meaning that they conduct some of their banking with alternative financial services. Many of these, such as payday lenders and check-cashing facilities, charge high rates for their services, which compounds the problem of poverty that underlies the lack of access to traditional financial services.
The post office is a natural place to provide financial services, not only because of its presence in every community, but also because the USPS already handles $65 billion per year in financial transactions. So it already has much of the necessary infrastructure in place. The USPS could provide bill paying and other services for a low price.
Perhaps most exciting is the possibility of creating a small-scale deposit bank that could finance national green infrastructure projects. Even small deposits, if pooled nationally, can provide a significant amount of funds that could be the basis of investment bonds to repair and modernize our failing infrastructure. The advantages are that a postal savings bank would operate outside of financial institutions that are at risk of failing because of the derivatives market, could be used for regional and national projects and would create jobs.
The Postal Service has been a central institution of government since before the founding of the country. In 1639, the first postal service was established in taverns and coffeehouses in the colonies. Ben Franklin was appointed postmaster of Philadelphia in 1737, when he was 31 years old, and in 1753 he was postmaster for the colonies. Throughout the nation’s history the Postal Service has evolved to serve the communications needs of the public, businesses and government. It continues to evolve in the internet age, providing the delivery service for the internet economy.
The potential is there for the Postal Service to expand its services to fill needs of the people and government. Short-sighted efforts at shrinking the Postal Service and cutting services – rather than allowing it to modernize, expand and fulfill necessary functions that it is best positioned to fill – are being pushed by privatization ideologues rather than people who have the best interests of the public at heart.
Fortunately, those ideologues are few in number and the majority of us support the USPS. It is up to each of us to get involved. Together we can make our communities and nation stronger by protecting our beloved Postal Service. Don’t shrink it! Expand it!
You can hear our interview Don’t Take our Post Office Away: Saving the US Postal Service, with Jim Sauber, here.