US Postal Service in Danger

Congress: House Democrats, led by Oversight and Reform Committee chairwoman Carolyn Maloney, have warned that the U.S. Postal Service is at serious risk of shutting down by June if Congress does not swiftly act to guarantee its solvency and protect its workers. Should that doomsday scenario come to pass, it would make it impossible for states to hold elections by mail, which experts have widely recommended as the safest option to preserve voting access amid the coronavirus pandemic.

The postal service has experienced a dramatic drop in the volume of mail being sent, thanks in large part to business closures, alongside a dramatic increase in the need to purchase protective equipment for workers. An uptick in package delivery has not been enough to make up the shortfall in revenues. Republicans have long supported efforts to privatize the postal service, which would raise the cost and reduce services for Americans in many communities. Because the GOP has passed legislation to cripple the post office in order to encourage such privatization, the postal service faces far different budgetary constraints than any other federal agency.

The USPS has been barred from being subsidized with taxpayer funds since the 1980s and instead must remain profitable on its own. Republicans also passed a law in 2006 that requires the agency to prefund its retiree health benefits 75 years into the future, costing the agency more than $5 billion a year. While prefunding benefits is by no means a bad idea on its own, no other federal agency—let alone the postal service's private competitors—operates under anything like that requirement, putting the postal service at a huge disadvantage.

If the postal service faced a more level playing field among its competitors when it came to pension obligations, its services would likely be more competitive and able to earn more revenue—and therefore it would not be facing its current shortfall. As well, letting this essential service rely on taxpayer subsidies at least in emergency situations would eliminate the potential for a crisis like this one entirely.

Congressional Democrats had proposed giving the postal service a $25 billion infusion and forgiving its $11 billion in debt to avoid a cataclysmic shutdown, but Senate Republicans stripped it out of the recently passed $2 trillion stimulus bill. Instead, the GOP supported a provision to let the agency borrow $10 billion from the Treasury Department instead of its yearly maximum of $3 billion. However, such a loan could only be used for operating expenses and not paying off debt, leading the agency to warn that the proposal didn't go nearly far enough.

It's critical that Congress passes a law to mandate and fund an expansion of mail voting in the states to ensure that tens of millions of voters aren't denied the ability to safely vote, and some states at least are already taking steps to do so on their own. However, in the worst-case scenario, where the postal service must cut or cease operations, states relying on mail voting would wind up in an impossible situation.

House Democrats were in a position of maximum leverage prior to the passage of the last stimulus bill, but they caved to Republicans when they agreed to a package that didn't include adequate election protection measures or direct postal service funding. However, they may still have a chance if further stimulus efforts take shape, though any hopes rest on whether Republicans recognize that their November election odds depend heavily on the state of the economy.


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