What Is Happening with the Postal Service?

            I have done my best for years to keep the Postal Service solvent. I send birthday cards and presents to my children and grandchildren by mail, and I am currently paying bills by mail. Since the coronavirus pandemic forced me to stay at home, I have been shopping more online. I even ordered birthday presents and had the store send the gifts directly to the grandchildren. What I am trying to say is that it is not my fault that the U.S. Postal Service has financial problems.


            Even with all the ways that I use the Postal Service, it struggles financially and has done so for many years. Currently, the USPS is blaming the COVID-19 pandemic for its problems, but they are not fooling anyone except Democrats who are always willing to give bailouts. Romina Boccia at The Daily Signal noted in her article that the problem is “unsustainable wage and benefit costs and unaffordable and inefficient service requirements.


            Now that there is less demand for postal services due to the COVID-19 pandemic, officials at the Postal Service are seeking a bailout from taxpayers of $75 billion. The congressional Democrats are calling for the bailout even thought the problem is nothing new. Boccia noted that “the Postal Service lost a whopping $8.8 billion” at a “time when the overall economy was still thriving” in fiscal 2019. In fact, the Postal Service has had “an operating deficit for 13 years in a row.”


            An organization can rationalize the need for a bailout in an emergency, but a record of 13 years of deficits cannot be classified as an emergency. The Postal Service received a $10 billion loan from the CARES Act, but there are pleas for a larger bailout. However, bailouts will not solve the basic problem: the agency is spending more money than it is bringing in. According to the article by Boccia, labor and retirement costs are the problem.

This [Government Accountability Office] assessment was based on basic math and obvious trends: First-class mail volume declined due to the proliferation of electronic communications, while USPS labor costs continue to escalate.

More than three-quarters of Postal Service expenses are for employee compensation. That includes salaries for mail deliverers, sorters, and post office clerks, along with health and pension benefits for retirees.

The importance of that final component cannot be overstated. A Treasury Department report from December 2018 showed that the Postal Service faces more than $120 billion in unfunded liabilities for retiree benefits.

Common sense tells us that the USPS needs to cut costs, and President Donald Trump’s most recent budget includes reform for the USPS. This reform could “save $91 billion over the next decade.” The USPS needs to create more revenue, but the only way to increase revenue is to increase the cost of mail service. With the current cost of a first-class letter being 55 cents, postal customers will increasingly use electronic means of correspondence and payment. Increased rates would cause fewer customers.

I believe that a better solution would be to cut costs. Would it make a lot of difference to anyone if mail were delivered every other day instead of every day? Some routes would receive mail on Monday, Wednesday, and Friday, while other routes got mail on Tuesday, Thursday, and Saturday. The number of postal employees delivering mail could be cut in half. Maybe the USPS could close a few Post Office buildings, such as one out of three. Another obvious way to cut costs is to phase out the pensions and institute retirement plans.

Some of these cost-cutting ideas would be smoother to implement than others, and some would be painful. However, beggars cannot be choosers. The USPS should not continue to expect the U.S. taxpayers to continue to bail them out. Congress must create a reform plan than would put the Postal Service on safe financial footing, and they should do it sooner rather than later.