This was supposed to be the year comprehensive postal reform was jump-started in Congress. A smooth functioning Postal Service remains indispensable to the economy. But the U.S. Postal Service has been under enormous financial pressure for the past decade, to the point where it could be insolvent in two to five years.
On December 4, 2018, the Treasury Department issued a much anticipated, thoroughly researched task force report, including discussions with 45 organizations. The report found that “the USPS’s business model — including its governance, product pricing, cost allocation and labor practices — must be updated in light of its current operating realities.”
The report put forward 25 recommendations. Of these, 15 could be enacted by the Postal Service, particularly through the work of its Board of Governors. Ten recommendations require legislation.
While there has not been a single comprehensive reform bill introduced in the House of Representatives or Senate, the Postal Service’s Board of Governors returned to a quorum in August 2019 for the first time since 2014. This means that important actions can be taken that the task force recommended, such as “pricing competitive products in a manner that maximizes revenues and generates income that can be used to fund capital expenditures and long-term liabilities.”
To galvanize the legislative process, there are three steps that Congress should take.
—Use the Treasury report as the foundation for reform discussions. Rather than re-inventing the wheel to determine what the components of postal reform should be, Congress should consider the far-ranging recommendations in the Treasury report. There is a lot to pick and choose from and debate.
—Strengthen those who oversee the Postal Service. The Postal Service’s two principal regulators, the Postal Regulatory Commission and the Office of Inspector General of the U.S. Postal Service, both need more resources. These agencies, a small fraction of the Postal Service’s size, have had frozen budgets for years. There is strong, bipartisan support for both to have significant funding increases in fiscal year 2020. Bolstering these agencies’ funding, which comes from the Postal Service and not taxpayers, is one of the most immediate and beneficial acts that Congress can take.
—Take stock of potential consequences of inaction. One central reason to be optimistic about postal reform is that the consequences of failure — letting the Postal Service get into a dysfunctional state where deliveries cannot be reliably made — will be widespread anger and general economic disruption. With more than 600,000 postal workers and scores of vendors potentially facing pay interruptions, the political retribution will be intense.
Another warning occurred on December 3 in Finland, when Prime Minister Antti Rinne resigned because of postal disruptions. In 1970, President Richard Nixon declared a national emergency when a postal strike disrupted mail delivery for eight days.
Legislative procrastination on postal reform is not only unstatesmanlike, it is also potentially a political hazard. Congress should take that to heart as it sets its 2020 legislative priorities.
