Separating myth from fact about the troubles of the Postal Service

BY KEVIN KOSAR

Key Points

• The US Postal Service (USPS) will not run out of money in the foreseeable future. It has more than $13 billion in cash and a new $10 billion borrowing line with the US Treasury.
• The agency’s mail collection, sorting, and delivery network has more than sufficient aggregate capacity to handle the ballots issued and cast by mail.
• The USPS has short-term problems with its delivery performance, its preparation for possible workforce depletions due to the coronavirus, and its public communications. The agency can and should address these matters promptly to increase Americans’ confidence going into the November 2020 election.
• The Postal Service has long-term problems, including more than $130 billion in unfunded obligations and structural operating deficits. Congress can directly address these problems with amendments to current postal law without radically cutting service or abandoning the USPS’s self-funding model.

The US Postal Service (USPS) generally does not make much news, but it burst into the headlines during the summer of 2020. The media and social media were suddenly full of allegations that the Donald Trump administration has unleashed “attacks” designed to “cripple” the Postal Service to justify its eventual privatization and undermine the election.

In August, there were three separate congressional hearings on the agency. Nancy Pelosi, Speaker of the House of Representatives, called the chamber back from a recess to vote on legislation to prohibit the USPS from doing anything that “would reduce service performance or impede prompt, reliable, and efficient services.” The Delivering for America Act passed by the House would appropriate $25 billion to the agency for no stated purpose, a radical departure from the appropriations practices of the past 50 years.

Senate Majority Leader Mitch McConnell said he does not intend to take up the legislation, although the topic likely will be considered as the two chambers consider an additional COVID-19 relief bill. The White House indicated it would veto the legislation.

For all the attention the Postal Service has received, Congress has barely focused its reform efforts on the agency’s pressing short-term and existential long-term problems. Unfortunately, it has focused on some nonproblems.

This report explains how the Postal Service suddenly became a prominent political issue. It then demonstrates that much of the concern raised this summer is unfounded, before laying out the agency’s real problems and plausible solutions.

Read the full report.

Kevin Kosar is a resident scholar at the American Enterprise Institute.