The United States Postal Service faces a major policy shakeup at a time when package delivery has become more central to Americans’ lives than ever.
A growing reliance on e-commerce has driven demand for direct-to-door shipping for everything from textbooks to toothbrushes. And to the casual observer, USPS is playing what looks like a seamless part in the process, with more and more packages delivered the “last mile” to customers’ doors by government workers.
But future retirement costs are snowballing and traditional letter mail has dropped drastically since 2006, when Congress made its most recent effort to modernize the mail delivery system and fix its finances. Package revenue is growing at a steady clip, but it pales in comparison to the cratering in letter mail volume. Combined with nearly $150 billion in unfunded liabilities facing the agency, USPS could face a taxpayer bailout and a possible radical drop in services if lawmakers don’t act.
President Donald Trump’s December task force report makes a strong pitch for a legislative overhaul. The report, released Dec. 4, said Congress and the executive branch should change how the mail carrier operates to increase revenues and remain off the taxpayers’ back for unpaid-for debts.
While not calling for outright privatization, the report suggests the White House is looking to shake up the agency’s labor and business models to cut costs and increase efficiency.
The stakes of a collapse of the Postal Service are profound. Seniors could lose steady access to prescriptions, companies’ shipping models could be disrupted, and retirees and employees could lose out on health care, income and wages if the USPS is forced to cut costs to meet retirement demands. Without sufficient cuts or additional money raised, taxpayers could be on the hook to pay for billions in deferred retirement and health liabilities after years of Congress doing nothing.
“It’s the 21st century, and the Postal Service is basically a 20th-century paper-toting entity. You adapt or you die,” said Kevin Kosar, vice president of policy for R Street Institute, who has written on Postal Service finances.