Trump targeting U.S. Postal Service

Bill Knight column for Mon., Tues., or Wed., April 30, May 1 or 2, 2018

President Trump this month launched an attempt to overhaul the Postal Service through an executive order forming a task force chaired by Treasury Secretary Steven Mnuchin to examine the Postal Service’s operations and within 120 days release a report outlining reforms.

Stating that the Postal Service had lost $65 billion since 2009, the order added, “The USPS is on an unsustainable financial path and must be restructured to prevent a taxpayer-funded bailout.”

Separately, Trump tweeted, “Only fools, or worse, are saying that our money-losing Post Office makes money with Amazon. THEY LOSE A FORTUNE, and this will be changed.”

A key fact that ignores: The Postal Service receives NO tax dollars for operating expenses, instead relying on the sale of postage, products and services to fund operations.

USPS has tried to correct uninformed attacks, reminding the public that “the reason we continue to attract e-commerce customers and grow our package delivery business is not because of unfair competition with private carriers, but because customers increasingly see the value of our predictable service, enhanced visibility, and competitive pricing.”

That doesn’t matter to critics like Trump.

Arguably just the latest of a series of blasts at Amazon, the executive order actually goes much deeper than just another inappropriate and probably unethical spat with someone with whom the President disagrees.

True, Trump repeatedly criticizes Amazon and accuses it of cheating the U.S. Postal Service by exploiting bulk-delivery rates, but the executive order itself doesn’t name Amazon. Also true, Trump has frequently complained about the company and its founder and CEO Jeff Bezos (who owns the Washington Post, which publishes independently from Amazon, though Trump has falsely accused the newspaper of being an Amazon “lobbyist”).

PolitiFact has reported that Trump’s assertions are false, and for its part Amazon says its customer orders paid $7 billion of the $19.5 billion generated last year in USPS’ package delivery services – 30 percent of USPS’ annual revenue. In addition, the $65 billion loss Trump cites was mostly because of a 2006 law mandating that USPS pre-fund health benefits for future retirees.

No, the order is less about personal and political animosity toward Bezos than doing the bidding of those who want to privatize the Postal Service to benefit competitors. Trump’s attempts at interfering with private enterprise and his one-sided feud with Bezos disguise the renewed effort to break up the Postal Service..

USPS for many months has worked to offset fiscal declines, especially in first-class mail, it’s said.

“We have reduced our annual cost base by approximately $14 billion since 2008,” USPS said. “Still, we have lost approximately 28 percent of mail volume since 2006, and are hamstrung from taking the necessary steps to account for that volume decline through restrictive statutory and regulatory restrictions that do not apply to private delivery companies.”

That refers to the mandate Congress imposed on USPS.

“Since the 2006 all-time peak mail volume, Congress passed the Postal Accountability and Enhancement Act (which mandated $5.5 billion per year to be paid into an account to fully prefund employee retirement health benefits, a requirement exceeding that of other government and private organizations,” USPS said. “The law requires the Postal Service to participate in and self-fund an unaffordable retiree health benefits system that is not fully integrated with Medicare. Among the commercial and governmental entities that offer and fund health benefits for their retired employees (an ever-shrinking pool), virtually every one fully integrates with Medicare. If the Postal Service were permitted to follow this uniform best practice, the Postal Service would have achieved net income.”

Despite that obvious “elephant in the room,” extremists seemingly want to dismantle the USPS and let corporations take over.

But the Postal Service still has advantages. Its 30,000 locations make USPS the country’s largest retail network – bigger than McDonald’s, Starbucks and Walmart COMBINED. And despite a decline in first-class mail, a few adjustments could make up the difference:

* revive the Post Office’s financial services – ranging from basic accounts to small loans – that helped its bottom line from 1911 to 1967, but were dropped;

* make UPS, DHL, FedEx, et. al. deliver their own “last mile” of any package – a service that the USPS now provides as a service; and

* free USPS from the extraordinary burden of pre-funding, letting it operate as other companies do.