The Postal Service Deserves a Permanent Bailout

Congress could take the Postal Service to such great heights. Photo: Erik S. Lesser/EPA-EFE/Shutterstock

Imagine if the United States had a federal agency so well run that it had maintained a 90 percent approval rating even as the public’s trust in other institutions had cratered. Imagine this entity also created hundreds of thousands of high-quality, middle-class jobs at a time when such positions were in short supply — while providing a valuable, publicly subsidized service to rural areas in desperate need of federal support.

Now, let’s say that some historic calamity dealt the U.S. a massive economic blow, triggering Great Depression–era levels of joblessness this year and putting America on pace to suffer upwards of 9 percent unemployment through the end of 2021. Let’s further stipulate that this crisis also happened to make the overwhelmingly popular agency’s services indispensable for meeting consumers’ needs and preserving the integrity of U.S. elections.

Finally, let’s say American taxpayers could fully fund this hypothetical agency for about $14 billion a year — in other words, for about one-tenth of the amount of money Congress has added to the Pentagon’s annual budget since Donald Trump took office.

Would you describe this agency as disastrously unaffordable and demand that it slash jobs, reduce employee benefits, and cut service to low-density areas as soon as possible?

If you are President Trump, a congressional Republican, or a centrist Washington Post columnist, then the answer is yes.

The agency I describe is, of course, not some utopian bureaucracy but the actually existing United States Postal Service (USPS). In real life, however, the USPS is not funded by congressional appropriations. Rather, since the 1970s, Congress has required the Postal Service to simultaneously:

• Finance its own operations, as though it were a business.

• Provide mail service to every part of the country — and charge Americans the same (affordable) postal rates no matter where they live, even if such Americans happen to reside in rural hinterlands that private carriers ignore because they cannot be profitably served.

This dual mandate was always a challenge. But as the internet’s growth reduced demand for snail mail, it became nigh impossible for the USPS to meet both of these requirements without cutting jobs and employee compensation. And, in 2006, a Republican Congress deliberately made the agency’s predicament worse by (needlessly) forcing it to prepay all its employees’ pension and retirement health costs decades in advance. All this rendered the Postal Service technically insolvent before COVID-19 made its presence felt in the U.S. Now that the crisis has also drastically reduced America’s overall mail volume, the agency’s revenue is in free fall. According to Postmaster General Megan Brennan, USPS will incur $22 billion in new losses over the next 18 months.

Congressional Democrats would like to help the Postal Service through this troubled time by providing it with a federal bailout. The Trump administration would like to use the agency’s financial crisis to both force through cuts to postal workers’ compensation and (for God knows what reason) screw over its own rural base by allowing the agency to charge low-density parts of the country higher rates. The president, meanwhile, ostensibly wants the USPS to bilk Jeff Bezos until he stops funding journalism critical of Republicans (this might be sound policy for punishing Trump’s personal enemies, but it would not actually solve the Postal Service’s funding woes).

Trump may boast the most absurd (and blatantly corrupt) position in this debate. But Beltway centrists who present “structural reforms” to the USPS as an objective, apolitical necessity are arguably more dangerous. In truth, there’s nothing wrong with the Postal Service’s business model that can’t be fixed by ceasing to run this essential government agency as though it were a business. The USPS’ growing crisis of profitability presents America with a choice: It can maintain the Postal Service in its current form by providing the agency with federal funding, or it can force the agency to cut jobs, benefits, and service provision.

The Washington Post’s Charles Lane does not want Americans to understand that the former is an option. Or at least this is what his recent op-ed on the subject would suggest. Observe how the columnist characterizes the Postal Service’s plight to his readers:

For years, experts warned the federal government that a disaster was brewing, yet elected officials of both parties took no action.


And so here we are, scrambling to prevent a possible national tragedy, having squandered precious time that could have been spent preparing for the inevitable.


All of the above refers, of course, to the financial crisis engulfing that venerable, and vital, institution known as the U.S. Postal Service.


… [T]he service amassed more than $77 billion in losses over the past 12 years, according to subsequent GAO analysis … “Urgent” change was needed, the GAO said in 2010, to right-size a far-flung network of post offices and other USPS installations, and to reduce labor costs that accounted for 80 percent of spending.

… Nothing fundamental was done, despite repeated legislative efforts, because Congress refused to act. Congress balked because beneficiaries of the status quo — subsidized commercial mailers, rural congressional districts and postal unions — resisted structural change.

Lane eventually allows that, in the present crisis, some federal aid to the USPS is “clearly warranted,” but adds, “the agency cannot survive over the long term without the structural change that has been postponed for too long.”

The columnist never acknowledges that the Postal Service was not always expected to cover its own costs, or that requiring it to do so was (and is) a political choice. Instead, he suggests that it is an objective, mathematical fact that the Postal Service “cannot survive” unless it slashes compensation for its workers and service for rural Americans.

This rhetoric is not only dishonest but dangerous. The COVID-19 pandemic has provided a harrowing object lesson in the importance of maintaining public faith in expert opinion. Many have rightly criticized the anti-vaxxer movement and right-wing cranks for undermining the trust in authorities on public health. But centrists who disguise advocacy for their tendentious policy preferences in appeals to “expert” opinion also bear some responsibility for the rising tide of anti-intellectualism.

In Lane’s accounting, the Postal Service has lost about $6.4 billion a year over the past decade. Since Trump took office, the Pentagon’s annual budget has grown by $130 billion. In other words, Congress could completely eliminate the Postal Service’s “financial crisis” by (1) reducing the Defense Department’s Trump-era raise by a tiny fraction, or (2) increasing America’s annual deficit spending by a tiny fraction, or (3) raising federal taxes by a tiny fraction.

Why, exactly, should these policy options be viewed as so self-evidently absurd that a respected commentator can write as though they do not exist?

After all, America has no crisis of fiscal capacity. In recent weeks, Congress approved $2.2 trillion in deficit spending — and inflation remains undesirably low while the U.S. dollar remains stronger on international markets than policy-makers would like. Simply put, if we can afford to reward the Pentagon’s calamitous failures with a $130 billion bonus, we can surely afford to solve the Postal Service’s financial problems by printing another $14 billion each year (or whatever single-to-low double-digit billion-dollar sum is required to defray the agency’s losses).

What’s more, if the present crisis has highlighted our country’s immense fiscal capacity, it has also exposed America’s dearth of state capacity: America is a country that can painlessly inject trillions of dollars into its economy but can’t actually put checks into its citizens’ bank accounts without a few months of advance warning. In this context, maintaining a government agency that boasts functioning offices in every corner of the country might be more valuable than avoiding an infinitesimal increase in the federal deficit. For much of its history, the Postal Service provided Americans with a public option for basic banking services. If Congress gave the USPS the authority to reestablish such services, and offer all Americans a free bank account (as congressional Democrats have proposed), then the federal government would be able to dispense rapid relief to individuals in future crises and recessions, potentially averting many billions of dollars in lost economic activity in the process.

To be sure, one can reasonably argue that America has public needs more pressing than indefinitely maintaining six-day-a-week mail delivery, even as the internet steadily reduces demand for that service. Perhaps, if we could cut mail service to five days a week — and seamlessly transfer the resulting surplus of manpower and resources into green-energy projects or high-quality eldercare — we would be wise to do so. But in the United States we actually live in, a dollar saved on the Postal Service would very likely become a dollar earned for the beneficiaries of regressive tax cuts or the military-industrial complex.

Regardless, the case for cutting public jobs and restricting mail service in the middle of a pandemic-induced depression seems quite weak — so weak that its centrist proponents would rather deceive the public into believing there is no alternative than argue for their position forthrightly.

The Postal Service Deserves a Permanent Bailout