Prisoners on bread and water get just the minimum to stay alive. For whatever reason, their wardens won’t simply kill them, but they won’t restore them to health, either.
The current way the Postal Service is existing is on political bread and water. It can’t be allowed to die, but there’s no political will (or incentive) to do what’s needed to bring it to health, either. Therefore, as America endures the impact of COVID, people ask whether the Postal Service will be able to survive the drastic loss of mail volume and revenue it’s experiencing. The short answer is yes, not because of help from Congress, but despite the lack of it.
There are many complex and politically touchy issues surrounding the bigger picture of the agency’s business environment, and none of them are being addressed by any of the possible forms of “stimulus” being suggested by or for the Postal Service. For now, the critical need is money.
But giving the USPS the necessary money – or any money – has become a hostage to the pernicious misinformation and political gamesmanship that, inside the Beltway, typically takes precedence over effective action. Authority to borrow another $10 billion (i.e., letting it go even further in debt) was contained in the first “stimulus” bill passed by Congress, but there’s been nothing since. There are four situations that contribute to this.
1. The USPS is an independent agency within the Executive Branch of the federal government; it’s supposed to meet certain public service obligations to be paid for by the revenues from postage and other services. It receives no support from the US Treasury (taxpayers). As its costs cannot be reduced in line with revenue loss-es – mail processing and delivery must continue even though current volume is 25-30% below what it was pre-pandemic – the shortfall will only become bigger and bigger. Current projections are for a $13 billion loss for the fiscal year ending September 30.
2. The prices for its competitive products (like Priority Mail and commercial ground parcels) are reviewed by the independent Postal Regulatory Commission for compliance with statutory requirements, particularly that they cover costs and contribute to institutional overhead.
3. The Washington Post is owned, personally, by Jeff Bezos, also the founder of Amazon. The Post tends to lean left and is a regular critic of the administration.
4. Amazon is a major USPS customer, and the rates for its parcels (like those of many high-volume competitive product customers) are established by a Negotiated Service Agreement that’s been reviewed by the PRC to verify the rates’ conformity with statutory criteria. The USPS is not losing money on Amazon.
However, the president has made Amazon a proxy for the Post, and has developed the belief that the Postal Service isn’t charging enough for Amazon shipments, that the USPS is losing money on each, and that the rates for Amazon parcels should be increased fourfold or more. As he stated a few weeks ago in response to a question about approving the previously-authorized $10 billion loan, until the USPS hikes Amazon’s prices, he’s not going to allow any financial assistance for the Postal Service.
Meanwhile, the chambers of Congress are ruled by two bitterly competing parties – one in the “blue” House and the other in the “red” Senate – and there’s where the reality of politics beats the reality outside the Capitol. The House, sympathetic to the postal labor unions, has been the source for repeated proposals for financial help for the Postal Service. The Senate, taking its cue from the White House, won’t let any such things survive.
In the House, the outspoken advocates for helping the USPS can expound all they want – assuring the continued support of their constituencies – knowing full well they can blame the other party in Senate for unfulfilled pleas for postal help. Across the Rotunda, the same script is used: the minority makes demands for postal assistance and the majority – unwilling to cross the president – scotches any help.
The president has said he won’t let the Postal Service die, but at the same time calls it a “joke” because its executives don’t agree with his off-base claims and follow his lead. Meanwhile, the 535 elected legislators at the other end of Pennsylvania Avenue play the time-honored game – protecting their own political interests rather than doing what most of the remaining population of America clearly understands needs to be done.
The Postal Service’s diet of political bread and water can’t go on forever; the political theater surrounding its current lack of vigor will end someday – hopefully, that won’t be too late for the USPS.
Leo Raymond is Owner and Managing Director at Mailers Hub LLC. He can be reached at email@example.com.