USPS Financial Self-Sufficiency Requirement Collides with Congress Members’ Insistence That No USPS Jobs Get Eliminated.
“A federal job position and its location are not guaranteed to be available for the life of the current occupant.”
The USPS is an awkward situation. It is a division of the Executive Branch. It is required to operate as a financially self-sustaining operation without financial assistance from the federal budget. It currently operates with about $82 billion in revenue, which is about one-fourth the cost of the recent USS Gerald R. Ford aircraft carrier and its air wing of 70-80 airplanes, not including their development costs. The USPS has been facing a long decline in volume of small pieces of mail and first-class letters, as so many of these items are sent electronically in modern times. Think of catalogs, bills, bill payments, and bank statements, just to name a few. Meanwhile, competition is hot for the more lucrative package shipping and delivery market. UPS, Fed-Ex, and Amazon have not asked if they can operate a brick-and-mortar retail business establishment in each and every zip code in the United States, from which they must deliver mail to every address, in competition with USPS.
Background
Without delving into the back-story too much, here are a few pointers for understanding how we got to where we are. First, congressional actions:
· Postal Reorganization Act of 1970. Shut down the U.S. Postal Department and opened the U.S. Postal Service under the Executive Branch. Requires USPS financial self-sufficiency, covering all of its expenses with its own revenue.
· Postal Accountability and Enhancement Act (PAEA) of 2006. This law imposed unique financial burdens on the USPS, such as the requirement to pre-fund retiree health benefits decades into the future, which has been a significant factor in the financial challenges faced by the USPS. At the time, USPS retirees were free to choose among private retiree medical insurance and not required to participate in Medicare, increasing the cost of this feature by a substantial amount.
· 2010 Appropriations and Emergency Funding. During the financial crisis of the late “oughts,” Congress provided a one-time $4 billion loan and deferred some of the retiree medical coverage pre-funding.
· 2020 COVID-19 Pandemic Funding (CARES Act 2020). The CARES Act provided $10 billion in funding to the USPS. This was structured as a loan from the U.S. Treasury. Later, the terms of the loan were modified to convert it effectively into a grant, meaning the USPS was not required to repay the funds.
· American Rescue Plan Act (2021). Although the American Rescue Plan Act did not provide funding to the U.S. Postal Service, it did provide support for increased package volumes and revenue for USPS.
· Postal Service Reform Act of 2022. While this act did not provide funding for the USPS, it did eliminate the requirement to pre-fund all retiree health benefits and it integrated postal service retirees into Medicare, saving quite a bit in future expenses.
Next, let us consider the breadth of the USPS operation. Traveling through any and many very small towns, one can easily encounter a surprisingly large, often upscale, building in small towns, in which the USPS services are expected to be the same for their zip code as it is for anyone else, no matter how many people live in the area covered by the zip code. Remarkably expensive when sales volume in such areas is very low. Yes, for USPS, expected to cover its own expenses, it must be looked at as Sales Volume. It is easy to see that so many one-zip code installations are money losing operations. That financial loss has to be recovered from somewhere else according to the Postal Reorganization Act of 1970.
Now, let us turn to the American tradition of “labor-saving devices.” The concept of capital-labor substitution is as old as economics itself. In the modern era, scanners, logistics optimization of routing, high-speed package handling, and many more remarkable technologies have reduced the need for so many USPS handling facilities and local buildings with service counters. These technologies have also reduced the need for so many postal workers, providing a payroll savings to the financial losses from some of the items mentioned here.
The Current Congressional Situation
The current Congress, led in part by my own beloved and supported-by-me-despite-this-issue Congresswoman Nikki Budzinski (D-IL), is circulating an idea that The Rest of Us (what you may call taxpayers, but I call The Rest of Us) are expected to protect federal jobs in the USPS no matter the cost or how ridiculous the financial burden on the USPS becomes. I have never thought a position within the Federal payroll was a form of employment protected from obsolescence. Especially when Nikki isn’t going to fund these obsolete workers by asking The Rest of Us to chip in, but is still expecting the USPS to be financially self-sustaining with two arms tied behind its back; one in the form of market circumstances while facing service mandates, and the other in the form of legacy patronage hiring requirements within an obsolete HR roster.
Nikki, please tell your brothers and sisters up there on Capitol Hill to get out of the way. The Rest of Us do not see all current USPS jobs as protected species. No one is entitled to an obsolete federal job, and you (collectively) are not entitled to require needless increased expenses in the management of a U.S. Service of the Executive Branch that you are requiring to cover its own expenses. Think about this: “We, the Congress, require you cover your own costs and we simultaneously demand you incur needless costs.” Get out of the way. Let the USPS consolidate service centers for mail handling, for retail service to multiple zip codes from one location, and for whatever is necessary in the face of current conditions. Get out of the way.
I’m still voting for you come November, Congresswoman Budzinski. But you have to use more common sense in examining all the facts together. A federal job position and its location are not guaranteed to be available for the life of the current occupant.
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