Congress Should Reform, Not Bail Out, the Postal Service

The rushed $2 trillion COVID-19 “stimulus” bill was infamous, not just for its size, but for its unrelated pork. In a bill aimed at addressing the COVID-19 public health crisis—one supposed to be characterized by hospitals short of resources, ventilators, and masks in short supply, as well as families struggling to make ends meet—the Kennedy Center got a $25 million bailout, “innovative sunscreens” were approved at the Food and Drug Administration, and NASA got $60 million.

Never one to miss a good bailout party, the United States Postal Service (USPS) also got a $10 billion loan. Yet they’re already back, asking for $75 billion more in the next phase of congressional relief efforts. Congress should resist these efforts.

It is debatable whether a second phase of relief effort is even warranted, as the economy, while far from recovered, is flickering back to life.

Moreover, there is the fact that COVID-19 hasn’t wrought any further destruction on the USPS than it was already bringing on itself. On May 8, the USPS announced its second quarter financials which showed no evidence that the pandemic has impacted the organization in any significant way. In fact, the USPS had a total revenue of $17.8 billion compared to the $17.5 billion in the same period last year.

But regardless, any future relief efforts should not continue to fund the USPS—at least not without significant reform as a precondition. “We are not going to do a part-time bailout,” then-congressman, and now White House Chief of Staff Mark Meadows told Postmaster General Megan Brennan in 2019. “I think the chairman would agree with me here, we want a plan so you’re not back here in two years asking for more money.”

It goes without saying that no plan has been forthcoming. Even so, the USPS is already back, asking for cash.

The problems at USPS are systemic—and that is, in part, the fault of Congress. Congress wants the USPS to be competitive with private enterprise, but refuses to allow it to take steps that would ensure this goal. Current federal policy restricts the USPS’s pricing flexibility, requires it to provide expansive employee benefits, imposes collective bargaining, and prevents meaningful cost-cutting measures.

But Congress also positions the USPS in a privileged manner. It has given the USPS a legal monopoly over letters and mailboxes—one that prevents entrepreneurs from entering the postal markets and fostering the competition that can reduce costs and improve quality for consumers.

Congress has also made the USPS exempt from state and local sales, income, and property taxes, as well as parking tickets and vehicle charges. It is immune from a range of civil actions and has its own government regulatory power to use against competitors. Should USPS find itself in a financial pinch, it can borrow up to $15 billion from the U.S. Treasury at low interest rates.

And yet, even in spite of this thumb on the scale, the USPS has run 13 consecutive years of multi-billion dollar deficits, losing $69 billion since 2007. Without reform, these losses undoubtedly will continue.

In 2018, the Department of the Treasury submitted a series of reforms for Congress to consider, recommending changes around institutional governance, price structures, cost allocations, and more. The report noted that “USPS’s ability to achieve and maintain sustainability over the long-term is dependent upon formative reforms to its business model that will enable it to flexibly and swiftly adapt to the social, technological, and operational changes in the mail and package markets.”

But it hasn’t happened, because Congress, as it does with so many things, continues to sit this one out—preferring instead to throw cash at a problem they have the power but lack the will to fix in a structural way.

As the country faced down the COVID-19 pandemic, some relief certainly was warranted to help the thousands of families and small business owners struggling to comply with the government-imposed shelter-in-place requirements.

But a necessary response to a pandemic evolved, as these bills so often do, into a ride-along for unrelated priorities, special projects, and, in the case of the USPS, a bailout which merely served to perpetuate a badly broken operation, rather than take aim at the root causes of its failings.

Rather than using billions of taxpayer dollars to paper over problems, Congress should step up and do its job. Stop bailing out the Postal Service. Reform it.

About Rachel Bovard

Rachel Bovard is senior director of policy at the Conservative Partnership Institute and Senior Advisor to the Internet Accountability Project. Beginning in 2006, she served in both the House and Senate in various roles including as legislative director for Senator Rand Paul (R-Ky.) and policy director for the Senate Steering Committee under the successive chairmanships of Senator Pat Toomey (R-Penn.) and Senator Mike Lee (R-Utah), where she advised Committee members on strategy related to floor procedure and policy matters. In the House, she worked as senior legislative assistant to Congressman Donald Manzullo (R-Il.), and Congressman Ted Poe (R-Texas). She is the former director of policy services for the Heritage Foundation. Follow her on Twitter at @RachelBovard.

Photo: Paul Ratje/AFP via Getty Images

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