The U.S. Postal Service Could Be Facing Its Financial Doom
The United States Postal Service is something we can often take for granted. Even in the digital age, physical postage is still a vital service. Many small businesses depend on the USPS, but reports indicate that the agency may be dying. Entering 2020, the postal service had $160 billion in outstanding debt, and it has been hit hard by the coronavirus pandemic.
Now as politicians discuss financial bailouts and stimulus, the topic of USPS relief has become a contentious one. Congress, which analysts argue is at least partially to blame for the agency’s financial problems, now may have to take action to keep the USPS alive.
The USPS’ Financial Health
Since 2001, the USPS has gradually handled less mail year over year, decreasing revenue and building debt as a result. In 2006 Congress passed the Postal Accountability and Enhancement Act, which experts now say hastened the decline of the postal service.
The act forced the USPS to pay benefits to workers and retired workers out of pocket, as opposed to being backed by the Treasury. These expenses became the biggest cost for the USPS and nearly 75 percent of the agency’s debt comes from retirement benefits.
Moreover, first-class mail, which is the highest revenue item for the USPS, has steadily declined since the Great Recession. In 2008 the postal service handled more than 90,000 pieces of first-class mail. Last year, that number was less than 55,000. All of these issues, coupled with the devastation caused by the coronavirus pandemic, have left the USPS in debt, vulnerable, and in need of aid.
Coronavirus and Stimulus
According to the USPS’s second-quarter report, the agency lost $2.2 billion between April 1 and June 30. The agency saw a sharp decline in overall mail but was able to offset those revenue losses by shipping an increased amount of packages. Still, the situation remains dire. “The strong growth of our package volume in the third quarter was encouraging, but there is great uncertainty about whether that growth will be sustainable,” USPS Chief Financial Officer Joseph Corbett said in a press release.
The postal service needs help badly, but providing funding to the agency has become a heated political issue. President Donald J. Trump has railed against the postal service in recent months, and his appointed Postmaster General, Louis DeJoy, has implemented changes that have slowed mail delivery. Critics have gone as far as accusing Trump of sabotaging the USPS in an effort to derail mail-in voting for the 2020 election.
Trump himself said as much, saying “If we don’t make a deal, that means they don’t get the money. That means they can’t have universal mail-in voting. They just can’t have it.”
The USPS did receive a $10 billion loan from the Treasury, but Trump and Treasury Secretary Steven Mnuchin threatened to withhold the funds unless the Treasury was given more oversight of the USPS. The postal service and Treasury reached a deal in late July to dispense the funds, but the USPS will almost definitely need more relief.
“There’s a White House agenda to privatize and sell off the public Postal Service. But there’s too much approval for the organization right now. They want to separate the service from the people and then degrade it to the point where people aren’t going to like it anymore,” Mark Dimondstein, president of the American Postal Workers Union, told Fortune.
What’s Next
As lawmakers debate a second stimulus package, it’s unclear if the USPS will see any aid. Trump reportedly threatened to veto the CARES Act if it included postal service relief, and politicians have yet to agree on further relief. The HEROES Act included $25 billion in funding for the agency, but it never made it through the senate.
The USPS is a critical service for the livelihoods of millions of Americans. The postal service delivers six days a week and is often the only mail carrier shipping to rural or remote areas. Businesses could collapse, people could be deprived of medicine shipments, and tons of lives would be damaged without the USPS.
In lieu of a formal stimulus package, Trump has passed a series of executive orders designed to bring financial relief but passed nothing regarding the USPS. It’s obvious the agency needs help, but time will tell if that aid comes.
See Also: How to Vote By Mail in the 2020 Election
