Why the post office is finally headed toward financial stability

A bill moving through congress relieves some of the strain on the USPS budget.

By Michael MarksFebruary 10, 2022 7:39 am,

Earlier this week, the U.S. House of Representatives approved a bill meant to fix some of the U.S. Postal Service’s long-running financial trouble. It’s a big step forward for the agency, which has posted a net revenue loss for 14 consecutive years under the specter of privatization.

Christopher W. Shaw, author of “First Class: The U.S. Postal Service, Democracy, and the Corporate Threat,” spoke to Texas Standard about the legislation’s significance, and the future of the postal service. Listen to the interview above or read the transcript below.

This transcript has been edited lightly for clarity:

Texas Standard: I can remember going way back – back into the 80s, 70s, maybe earlier –that the Post Office has struggled with financial strains. Why has the USPS dealt with lingering financial problems over all these years? That can’t possibly be email, or the rise of FedEx, although I’m sure that those have been contributing factors in recent years.

Christopher Shaw: Well, it’s a public service, so it operates on a break-even principle. So that means that it’s actually not supposed to make money. It has a balancing act it’s supposed to try to achieve. And the problem in recent years, that this legislation that’s in Congress right now addressed, is getting rid of a unique requirement to prefunded retiree health benefits that no other government agency or private corporation attempts to do. And so that will reduce at least around 90% of the Postal Service’s losses in the last 15 years, since that particular requirement was originally placed on the agency.

The U.S. Postal Service has an interesting relationship. It’s not quite quasi-governmental like Amtrak, but it is a kind of a what an apolitical organization. There have been efforts to try to keep it out of politics, right?

Well, it’s a it’s a government agency that’s owned by the American people, through the federal government. But at the same time, it operates independently in a way where it’s shielded from politics. So it used to be that the postmaster general was appointed by the president. That’s no longer the case. Now there’s a board of governors, the members of which are appointed by the president, and they oversee the enterprise and operate it.

So what are Postal Service officials saying about this bill that would cut its share of health benefits for retirees?

Everybody connected with the Post Office thinks this is a good idea, and they’ve been pushing for, for years. But the thing is that the Obama administration didn’t really make the Post Office a priority. The Trump administration spent more time criticizing the Post Office than doing anything to help it. And so even though this has been an outstanding issue for years, it’s only now that we’re finally seeing action taken to correct a problem that everyone’s agreed to have been addressed a long time ago.

But what if you’ve been working for the Post Office and counting on retirement counting? You have an expectation of what your employer has been doing to try to secure your retirement. I mean that would be a somewhat scary proposition. It would seem to me.

Well, no. All the benefits that are supposed to be there will still be there. It’s just that most organizations. They’ll prefund retiree health benefits. It’s kind of more of a pay as you go model. They prefunded a few years in advance. The Postal Service was attempting to prefund literally decades in advance, so it was a very unusual financial burden that it was attempting to meet, and that has now been corrected so that it’s more in line with typical practices.

So you’re not seeing much pushback here when it comes to these changes?

No. And in fact, the Postal Service in this bill is a very unusual example of bipartisanship with a lot of Republicans and Democrats that are behind it. And that’s why it passed in the House just a couple of days ago, and it looks likely to pass in the Senate as well.

Will this fix what ails the U.S. Postal Service or no?

This will take a huge albatross off the neck of the U.S. Postal Service and really allow it to start focusing on the future and getting prepared for the world at play, down the road. So it’s a small step, but it’s also a big step that will allow it to really kind of move into the 21st century.

What other issues does the Postal Service face? I mentioned a couple. They have some pretty stiff competition from some corporate players.

Well, I think the big issue is will continue as a democratic public service that serves everyone in an egalitarian and equal way, or will become a for-profit business that puts profit first. And this would fracture the universal service principle that has always been the guiding light behind the operation of the U.S. Post Office – the idea that everyone gets served. It doesn’t matter how remote a location you live in, or what income you have, you all get equal service.

And so I think that’s a question going forward that the American people are going to have to decide, do they want that traditional democratic public service, or do they want to turn it into something like a business just like any other? But the cost of that would mean that a lot of people would probably be left out and would not receive the kind of service that traditionally they’ve been able to expect.

I know in the past that’s been discussed, but is that currently on the table, the possibility of privatization?

It isn’t something that’s on the front burner right now, but it is something that is constantly an issue when postal matters are discussed – that it should be more like a business and less like a public service. So it’s always there in the background.

What about public confidence and trust in the U.S. Postal Service? I wonder if the pandemic has in any way affected the public’s relationship with the USPS.

I think it’s made a lot of people understand how much they rely on the Post Office and how dependent they are on it. For instance, we saw that in the 2020 election, with millions of people using vote-by-mail, people sheltering in place, and the pandemic and getting a package delivery. So I think that the Postal Service is something we take for granted, and I think that the recent years here, we’ve come to understand that it is a valuable resource that we can’t take for granted. And then there’s also the approval rating for the Postal Service. It’s always very high. It’s the highest approval rating of any arm of our government.

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