This week, a task force created following an April executive order from Trump, is scheduled to deliver its recommendations for an overhaul of the Postal Service. Led by Treasury Secretary Steven Mnuchin and White House budget director Mick Mulvaney, the task force is expected to endorse the privatization proposal buried in the White House’s plan to reorganize the federal government — a radical assault on the administrative state.
That reorganization plan claimed that “USPS’s current model is unsustainable.” But while the Postal Service is losing money, its financial woes are largely the result of bad policy.
Nearly all the agency’s losses over the past decade are attributable to a 2006 law requiring it to pre-fund retiree health benefits for 75 years, an onerous mandate that doesn’t apply to any other agency.
As the Postal Service’s Office of Inspector General explained in 2015, the pre-funding requirement essentially amounts to a credit card company saying, “You will charge a million dollars on your credit card during your life; please include the million dollars in your next payment.”
Rather than solving the problem, privatization would create a host of new ones. The administration has cited the “successful model” of postal privatization in other countries, but such efforts in Europe have resulted in severe job losses and wage cuts for postal workers, and increased prices and reduced mail delivery access for customers. These are the inevitable consequences of a system that views postal services as a vehicle for private gain instead of a public good.
“If the goal of the Postal Service is to make as much money as possible,” Sen. Bernie Sanders, I-Vt., told the Nation in June, “tens of millions of people, particularly low-income people and people in rural areas, will see a decline in or doing away with basic mail services.”
Indeed, under a U.S. privatization scheme, it is rural communities that would suffer the most. Unlike private companies that won’t deliver to certain remote areas because it’s not profitable to do so, the Postal Service is obligated to serve all Americans regardless of where they live.
“The local U.S. post office has become a source of identity for many rural communities as school systems consolidate and small businesses move or close,” explained Jobs With Justice executive director Sarita Gupta, quoting an Ohio member of the National Family Farm Coalition, at a recent briefing on Capitol Hill.
In that sense, privatizing the Postal Service is yet another Trump policy that would hurt his own working-class supporters — which may help explain why 16 House Republicans have signed on to a resolution opposing it.
If the Trump administration were serious about revitalizing the Postal Service, there are several practical steps it could endorse.
Beyond eliminating the burdensome pre-funding requirement, one promising idea that is gaining momentum among progressive leaders is postal banking. In April, potential 2020 presidential contender Sen. Kirsten Gillibrand, D-N.Y., introduced a bill that would enable post offices to provide basic financial services, including check-cashing and small, low-interest loans, an idea that Sanders and Sen. Elizabeth Warren, D-Mass., also support.
This common-sense proposal — effectively a “public option” for banking — would benefit millions of Americans who are currently under-served by the financial industry. Allowing the Postal Service to offer new products, such as gift-wrapping and notarization, would also increase revenue. Meanwhile, the agency could reinforce its role as a core democratic institution by promoting an expansion of vote-by-mail, which has been shown to increase voter participation.
As the midterms approach, it seems unlikely that congressional Republicans will prioritize the destruction of a wildly popular agency. Even so, Trump’s proposal clearly reflects the extreme philosophy of a party that would eagerly privatize many critical public services if given the chance.
In stark contrast with Republican attempts to demonize government and diminish its role, the Postal Service embodies the vital role that public institutions can play in advancing the common good.
Katrina vanden Heuvel, editor and publisher of the Nation magazine, writes a weekly online column for The Washington Post.