Column: President’s attack on Postal Service is misguided

For the Valley News
Published: 5/20/2020 10:10:12 PM
Modified: 5/20/2020 10:10:03 PM

The president has made it clear that he would like to see the U.S. Postal Service dismantled and turned over to private enterprise. Clearly, his position is based on both misconception and gross misinformation.

The assertion that the Postal Service is losing money because it has a “sweetheart deal” with Amazon has no merit. The 2006 Postal Accountability Enhancement Act makes it illegal to price parcels below delivery cost. The Postal Service and Amazon have a contract under which the Postal Service is paid $2-$8 for every parcel delivered on behalf of Amazon. The Postal Service is able to offer lower delivery prices than UPS or FedEx because it already serves every address in the U.S. six days a week, and so the cost of leaving an extra parcel is marginal. Going that “last mile” for companies like Amazon accounts for 28% of postal revenue, providing a significant source of income for the service.

The president is wrong when he alleges that the contract with Amazon is the driving force behind the Postal Service’s financial woes. The actual reason for the shortfall is the congressional mandate that requires the service to pre-fund the health insurance premiums of its retirees going 75 years into the future, and to accomplish this feat within a time frame of 10 years. (Note that some of the postal retirees to be covered have yet to be born.) No other federal agency or private business is similarly burdened. Without this mandate, the Postal Service would be breaking even or in some years showing a modest profit or loss. The U.S. House of Representatives has passed H.R. 2382 to remove the pre-funding mandate, but, as with the other 200-plus pieces of legislation passed by the House during the 116th Congress, this bill continues to languish on Majority Leader Mitch McConnell’s desk in the Senate.

It’s obvious that the president’s objective is to privatize the Postal Service. If that were to happen, the corporation assuming ownership would be free to charge as much as the market would bear and could carry on its operations without being encumbered by the governmental safeguards that currently protect the American public. As with other large corporations, the CEO would expect to be compensated in the millions and stockholders would anticipate reasonable dividends from their investments, making a hefty profit margin imperative.

On the other hand, our nation’s postal system was established for the sole purpose of providing a service to the American public. Under the terms of the Postal Reorganization Act of 1970, the old Post Office Department was removed as a taxpayer-supported entity and replaced by the U.S. Postal Service, a quasi-independent government agency given the mission of offering postal services on a break-even cost basis, not with the goal of generating handsome profits on the backs of the American public.

The current, universal six-day-a-week delivery standard might not be economically feasible for a corporation, particularly in rural areas. This financial challenge would inevitably lead to less frequent delivery, a delivery surcharge (as is the current practice with some private delivery companies), or both.

The Postal Service provides for the “security and sanctity of the mail,” meaning that anything sent at First Class rates can’t be opened for inspection without a court order. This governmental regulation does not apply to items sent by UPS or FedEx. On the contrary, private delivery companies are free to open and examine anything sent through their systems without repercussion. The Postal Inspection Service (a federal law enforcement agency) adds yet another significant layer of protection by investigating and prosecuting illegal activities, including theft and consumer fraud perpetuated through the U.S. mail.

In addition, the Postal Service is a major employer of veterans: There are 113,000 vets currently in its workforce.

The Postal Service’s roots are embedded in the U.S. Constitution. Members of Congress must work together on a nonpartisan basis to ensure that it remains intact.

Mary Nadeau, of Hartford, is a retired postmaster and president of the Vermont Federation of the National Active and Retired Federal Employees Association.

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