S. David Fineman: Quit interfering and save the Postal Service
The U.S. Postal Service is in trouble and needs help just like the airlines, large and small corporations, and consumers. There are ways to save it if Congress takes action very soon.
Where to start with its problems? The USPS is losing billions because of the pandemic. Its leadership has said running out of money is a question of when, not if. Its board of governors temporarily lost its quorum this year and is now made up only of Trump administration appointees. The president of the United States called the Postal Service a "joke." And now state election officials are warning that reduced mail service could interfere with mail-in ballots in November.
I served as a governor of the United States Postal Service from 1995 to 2005. I was nominated by President Bill Clinton, and served as chairman during the administration of President George W. Bush. By law, the USPS should have nine members on its board, five of one party and four of another. During my tenure, there was never any interference by the president in the business of the USPS, like there is currently.
What is happening now is unprecedented, and we wonder why. Let us hope it is not to disturb the election process and mail-in ballots.
During my first year on the board, it became clear the rate-making process, which decides how much one pays to mail a letter or a package, made no sense. Not until 2004 was there movement on any legislation in Congress. Eventually the chairman of the committee overseeing the Postal Service, Dan Burton, an Indiana Republican, and the ranking member, Henry Waxman, a California Democrat, agreed on the outline of a bill. The bill, with a few changes, passed the House of Representatives and the Senate, and then was signed into law by Bush in 2006.
One section of that legislation called for the USPS to prefund its pension obligations for 75 years. I remember meeting with the then-postmaster general, and after a thorough briefing, we both concluded the USPS would never have the necessary funds to prefund those obligations. However, we were unable to change the minds of the congressmen in charge. As best I knew, no private company had a similar obligation, and maybe naively, I believed Congress would amend the law in due time to eliminate that burden.
So here we are in 2020, in the middle of a pandemic. Congress and the administration cannot agree on how to fix the USPS. Everyone in the so-called postal community, including its unions, agree the prefunding requirement is not needed. Let us get legislation to eliminate the prefunding requirement passed.
What else can be done? First, let us stop the parochial mindset of Congress. The USPS has needed to right-size for some time, and not just close post offices. Because of population shifts, it can consolidate large processing plants, so they can process mail from various states and municipalities.
Last week, the U.S. Treasury released $10 billion already allocated to the USPS, with conditions that are at best questionable. It was required to share with Treasury details of contracts it negotiated with Amazon and others. Congress should allocate without any conditions, just like it has bailed out multinational corporations as a result of the pandemic.
If we believe what we hear from the administration and the postmaster general, they seem to have two solutions: First, raise the price of packages, although the rate-making process has confirmed the prices set were fair, and within the confines of the law. Second, cut the pay of the unionized workforce, which has already suffered thousands of coronavirus illnesses and, at last count, at least 60 deaths.
If the price of packages is raised, who pays? The consumer, and small businesses, not just on packages sent by USPS, but by every private delivery service. That is the reality of how business works, and to deny it is not dealing with reality.
As USPS raises its prices, you can be assured that the private delivery services will raise their prices. Considering the present composition of Congress, the provisions of the law regarding how union contracts are negotiated is not about to change.
With the pandemic, the USPS is needed more than ever before. Small businesses and the average American rely on delivery of mail six days a week. They need to get their checks, their letters and packages on time.
The USPS needs help, and there is a way to fix it.
The administration must stop holding the USPS hostage to its own private agenda. Rural America and the inner-city population would suffer more than anyone else. The solutions are clear. Let us just get it done.
S. David Fineman, an attorney in Philadelphia, is a former chairman of the board of governors of the U.S. Postal Service.
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