Congress Is Sabotaging Your Post Office

The Postal Service was once one of the world’s most impressive institutions. Here’s how to make it thrive again.

The Larry Doby Post Office is located at 194 Ward Street in Paterson, New Jersey, across the street from my congressional office. Dedicated on August 28, 1933, by the legendary Postmaster General James Farley, the structure was one of the many built by Franklin D. Roosevelt’s administration in the throes of the Great Depression. While it may not have one of the stunning murals created by Roosevelt’s Section of Painting and Sculpture, I still marvel at the managed grandeur of its deco buttressing, the green glow of the elevated banker’s lamps off the marble walls, and the banks of brass P.O. boxes. My hometown has bounced like a cork in seas of social tumult, but the Ward Street post office has endured as I’ve always known it.

There is a cynical trope that Congress spends too much time naming post offices, but I don’t view the matter as insignificant. Post offices are open gates to American history and markers of an optimistic past. Even as smartphones and electronic communication permeate every crevice of daily life, the United States Postal Service (USPS) forms a lifeblood circulatory system connecting every community in the Union. For this reason, my work to rename the Ward Street building for Doby, an African American baseball legend and favorite son of Paterson, remains a highlight of my career.

Unfortunately, when it comes to Congress and the post office, the problem isn’t too much affection. For decades, Congress’s attitude toward the post has ranged from neglect to hostility. As a result, the USPS is struggling. In November 2018, it announced a net decline of $3.9 billion, continuing a twelve-year negative run.

The agency has been subjected to withering criticism by a spate of congressional hearings and Government Accountability Office analyses. A recent task force created by President Trump labeled the Postal Service’s financial path “unsustainable,” and recommended changes that would push the post closer to complete privatization. Under mounting political pressure, the post office itself has endorsed draconian layoffs and proposed ending Saturday delivery, among other savage cuts.

What is causing all these troubles? Is the Postal Service hopelessly outdated and dysfunctional? No. While it’s tempting to think of it as a mastodon from the pre-internet era, the post remains one of the most impressive enterprises on earth.

The USPS handles 47 percent of the world’s mail, delivering nearly 150 billion mail pieces annually. It delivers more in sixteen days than UPS and FedEx, combined, ship in a year. The agency has roughly half a million career employees spread out across almost 31,000 locations. Post offices are tucked into every state, across far-flung Native American reservations, and in remote protectorates. If it were a private business, the post would rank around fortieth on the Fortune 500. And you can send a letter from coast to coast for two quarters and a nickel—less than the cost of a candy bar.

In 2006, Congress required that the Postal Service pre-fund its health benefit obligations at least fifty years into the future. This rule has accounted for nearly 90 percent of the post’s red ink since.

Not surprising, then, that Americans consistently rank the post office among the most popular arms of government. A February 2018 poll by the Pew Research Center, for example, found that 88 percent of Americans have a positive view of it. That’s higher than the approval ratings for the Centers for Disease Control and Prevention, the Federal Reserve, and the Federal Bureau of Investigation. 

It’s true that technological change has affected the Postal Service’s fortunes. As people send fewer and fewer letters, the volume of first-class mail continues to tumble; between 2016 and 2018, it dropped by more than 4.5 billion pieces. This depresses the post’s revenue, forcing it to take on more debt, which in turn puts it under greater financial pressure. But as online shopping slowly replaces in-person retail, the post is sending and delivering more packages than ever before, which compensates somewhat for lost revenue. Lower mail volume is not the main issue.

In reality, most of the post’s wounds are politically inflicted. In the early 1970s, Congress passed legislation that shoehorned the agency into a convoluted half-public, half-corporate governing structure to make it operate more as a business. And in 2006, Congress required that the Postal Service pre-fund its health benefit obligations at least fifty years into the future. This rule has accounted for nearly 90 percent of the post’s red ink since. 

For the most part, these harmful “reforms” have originated on the political right. To argue that the Postal Service needs to be privatized, conservatives need to show that it is dysfunctional, and there’s no better way to do that than by weighing the agency down with impossible financial obligations. It continues a generation-long pattern of institutional vandalism by Republicans across government. But ultimately, both parties bear responsibility. I should know: I was in Congress when we passed the 2006 bill. And, along with all my colleagues, I made the mistake of voting for it.

But the good news is that just as Congress put the Postal Service on its current dangerous trajectory, so can Congress put it on a sustainable path, bringing our cherished institution back to full health. In fact, I believe we can go even further. With its massive infrastructure network, post offices could revolutionize how the American people perform a variety of essential tasks, from voting to paying taxes to banking. Tapping into this network has the potential to revitalize both the Postal Service and our democracy. Instead of discussing how to cut the post office, we should be talking about how to expand it. 

Arguments about whether the post should operate like a business date back to America’s founding. While debating the original Post Office Act, a group including Alexander Hamilton argued that the post should support itself and make money for the rest of the government. Others, including George Washington and James Madison, didn’t seem to care whether it turned a profit. Jonathan Trumbull, the speaker of the House of Representatives in 1792, observed that having the post subsidize the circulation of periodicals would be “among the surest means of preventing the degeneracy of a free government.” In the end, Washington and Madison won the day. The government allowed printers to ship their newspapers and magazines at a very low cost: one cent to destinations within 100 miles, and one and a half cents to destinations more than 100 miles away. This set off what one researcher called “the greatest explosion of newspapers in history”—and with it an explosion in literacy.

By the mid-nineteenth-century mark, the Washingtonian view of the post as a public good was deeply entrenched. An early congressional postal commission posited that the post office existed not for generating revenue but for “elevating our people in the scale of civilization, and binding them together in patriotic affection.” Legislation enacted between 1845 and 1851 codified inexpensive letter postage and further redefined the post’s place in public life. The ratification of these reforms signaled the full defeat of the idea that the post must be independent. It was entitled to government support, deficits be damned. 

Over the ensuing hundred years, the post would usher in a second American revolution. Delivery of home mail precipitated road building and allowed Americans to fan out and settle across the nation. Postal contracts sustained the construction of transcontinental railways that would have otherwise been economically unsustainable. And it was the post office, not the military, that got the U.S. government to finally invest in aviation and help birth commercial flying. 

The post has also been an agent of upward social mobility. For generations, African Americans were locked out of good government jobs. But as the federal bureaucracy began to desegregate, black workers joined the USPS en masse. Under the Harding and Coolidge administrations, black people made up between 15 and 30 percent of postal employees, making the agency one of America’s foremost incubators of the black middle class. The post also factored significantly into Roosevelt’s efforts to fight the Great Depression. Between 1932 and 1937, the government built more than 1,300 post offices. Many were enhanced with the beautiful murals FDR believed would bring art to the nation. The agency’s central role in America’s development was perhaps best summarized in the Postal Policy Act of 1958, when Congress declared that the post was “clearly not a business enterprise conducted for profit” but a public service designed to promulgate “social, cultural, intellectual, and commercial intercourse among the people of the United States.”

But, in the 1960s, that view began to change. After years of underinvestment relative to the rise in demand for its services, the post faced a huge mail backlog in Chicago. Ten million pieces of undelivered mail piled up in the city, and the Lyndon Johnson administration established a commission to look into the agency. It was headed by a former AT&T chairman and stacked with CEOs and business school deans. In 1970, the post office was wracked by a debilitating worker strike. The backlog and the strike spurred a political overreaction. 

Following the strike and the commission’s 1968 recommendations, Congress passed the Postal Reorganization Act of 1970, which exiled the postmaster general from the president’s cabinet and downgraded the post office from a federal department to an independent federal agency. Ostensibly designed to modernize the post and free it from a history of patronage, the legislation proved profoundly shortsighted. It required that the post largely pay for its operations out of its own revenues, and it split leadership of the Postal Service between the postmaster general and a board of governors, the latter of which has been largely dominated by technocrats who see the post foremost as a business. At the same time, however, the post was still subject to congressional oversight. It’s hard to imagine any corporation that would agree to operate under this peculiar hybrid structure. Even today most Americans don’t realize that despite their reliance on it, our post is not a part of the government in the same way as the Department of Agriculture or the Pentagon, and receives effectively no support from the federal budget.

Unfortunately, the 1970 bill was only the first in a series of legislative blows against the post. From 1808 until 1995, Congress had a full congressional committee for the Postal Service. But as part of his war on government, Speaker Newt Gingrich relegated its duties to the present-day Oversight and Reform Committee, where they were assigned to a postal service subcommittee. In 2001, the Republican House majority disbanded the subcommittee altogether.

But the most destructive change of all was the Postal Accountability and Enhancement Act (PAEA). The bill has an unfortunate history. It was hurried to the floor during a lame-duck Congress weeks after Republicans were routed from their twelve-year congressional majority in the 2006 midterms. Committee leaders told us that the legislation was critical to “saving” the post, and we were rushed into voting for the bill without fully considering its motivations or long-term impacts. The legislation was passed by voice vote—without objection. It was a blunder, one of the worst pieces of legislation Congress has passed in a generation. 

While the PAEA included some positive measures, including giving the post increased autonomy over its rates, the law generally tightened a noose around the USPS. It further narrowed the post’s charter and prohibited the Postal Service from engaging in new activities outside of mail delivery. The law’s most destructive section, innocuously labeled “Postal Service Retirement and Health Benefits Funding,” imposed an unusual requirement on how the post covers its employee health pensions. Prior to 2006, the post funded its pensions like all agencies: pay as you go. Now, however, the agency had to pre-fund the health care benefits of employees at least fifty years in advance. To meet this requirement, the post was obligated to place approximately $5.5 billion into a pension fund each year between 2007 and 2016, followed by additional large annual payments.

Even today most Americans don’t realize that despite their reliance on it, our post is not a part of the government in the same way as other agencies, and receives effectively no support from the federal budget.

The measure has been a fiendish straitjacket, akin to making a prospective homeowner cover an entire thirty-year mortgage before the ink is dry on the deed. The provision is even more onerous given that the government requires the treasury to invest all postal workers’ retiree money in government bonds, guaranteeing miniscule returns. Unsurprisingly, the post has defaulted on all of its pre-funding payments since 2011, to the tune of at least $40 billion. In each of the last three years, the pre-funding burden well exceeded the post’s total losses. Overall, pre-funding accounts for almost all of its losses since 2006. 

No other agency or department is subject to this requirement. So why is the Postal Service? The George W. Bush administration demanded its inclusion and used the savings it generated to try to balance the budget. Dutiful Republicans said it was necessary to ensure that the post doesn’t generate a “huge unfunded liability” that would require a bailout from the government, an absurd posture they still maintain. But the requirement’s main upshot has been to plunge the Postal Service into a perpetual fiscal crisis that in turn justifies further attacks from the right. Full privatization is still neither politically nor logistically feasible, but that won’t stop Republicans and their allies from trying. 

Trump’s recent Postal Service task force fits into the gradual push toward privatization. The task force’s ultimate conclusion bore all the hallmarks of a far-right hit job. Rather than focusing on the Postal Service’s pre-funding
provision—which the final report actually recommended keeping—the task force emphasized the supposed need to lower Postal Service delivery standards and eliminate employees’ collective bargaining rights. The task force also recommended diluting the post’s universal service guarantee, which would wreck the agency’s functionality in rural communities. In a country where rural citizens already feel detached from the rest of the nation, such an outcome would only widen existing cleavages. Convened in secret, Trump’s task force was designed with the Orwellian purpose not to save the post, but to further weaken it.

I am heartened that Democrats routinely unite to oppose privatization. But merely saying that the post should not be privatized comes from a defensive posture. The solutions we pursue must be bolder.

Any serious reformation of our post begins with eliminating the odious pre-funding anchor. But that’s only the start. To really improve the agency, we need to fully reject the idea that it should be run like a business. There is a reason why the Founders made the Postal Service a federal department, and there’s a reason why it remained that way through the better part of the twentieth century. Policymakers wanted to make sure that Americans could affordably send and receive mail from anywhere. In pursuing that aim, the USPS has played a key role in developing our country. To that end, we should evaluate reviving the U.S. Post Office Department and making the postmaster general a cabinet official once more. It’s time that we again treat this agency like a public good rather than a private business. 

We need to fully reject the idea that the Postal Service should be run like a business. There’s a reason why the Founders made it a federal department, and why it remained that way through the better part of the twentieth century.

Nowhere is this perspective needed more than in Congress. In the House and Senate, we have become hostages to a fiscal imprisonment outlook, viewing almost every question through the single calculation of whether it will raise or lower revenue. Republicans have used the specter of deficits as a cudgel to beat back funding increases for all departments and programs. Browbeaten, too many Democrats have gone along. But while deficits matter, the Postal Service isn’t running losses because it’s inefficient. It’s running losses because of political sabotage. 

It’s time for Congress to admit that the hybrid structure it sanctioned forty-nine years ago is not sustainable. So long as the post exists half as a business and half as a public enterprise, forced to make money even as it is constrained by preposterous rules and counterproductive meddling, it will wobble and teeter. Meanwhile, privatization advocates will continue to chip away at one of the world’s most impressive agencies.

That doesn’t mean the Postal Service should be free of interrogation. The post, for example, must fix its deal with Amazon. The company ships perhaps two-thirds of its packages through the public mail, and its pricing and delivery terms are separate from those afforded to other businesses that ship through the post.  This comes courtesy of a secret 2013 negotiated service agreement whose provisions have been hidden from even Congress. The secrecy suggests that Amazon is getting a deal other retailers don’t enjoy. 

There is some logic for a deal between the post and Amazon. But if the world’s best delivery system is awarding Amazon a volume discount, it makes it more difficult for the company’s competitors to challenge Amazon’s prices. This sets a dangerous example for competition policy. The U.S. Postal Service is a public facility. It should not be used to further entrench the monopolistic power of a private company. Nor does it need to. Amazon does not have the post’s infrastructure, and Jeff Bezos’s vaunted delivery drones aren’t yet operational. The Postal Service’s biggest rivals, UPS and FedEx, simply can’t match the agency’s services. In negotiations, the post should take a harder line and force Amazon to pay more. 

Congress can help spur the Postal Service into bargaining harder by using its hearing power to make the current Amazon deal public. Given that Congress has paid so little attention to the agency in the past, this kind of engagement is sorely needed. Currently, the House subcommittee that deals with the USPS is responsible for monitoring a mind-boggling number of other federal functions and agencies, including (but not limited to) government management and accounting; federal property; intergovernmental affairs, including with state and local governments; and the entire civil service. It’s no wonder the post has become of tertiary importance in the people’s house. Between 2005 and 2018, the House Oversight Committee held 417 hearings, of which just seven were related to postal issues. This negligence helps explain why legislation that kneecaps the USPS, like the 2006 Postal Accountability and Enhancement Act, glides through Congress before members really consider its consequences. 

The two House members with the most control over postal issues, House Oversight Committee chairman Elijah Cummings and government operations subcommittee head Gerry Connolly, are champions of the Postal Service, and I believe they will dedicate attention to the issues facing the agency. But both of their bodies are swamped with other valuable work, including bringing needed oversight to the river of corruption flowing from the Trump administration. Over the next few years, Congress should therefore consider bringing back the full Postal and Civil Service Committee or, at the very least, creating an exclusive postal subcommittee. 

To truly move beyond playing defense, however, Democrats need to reimagine what the Postal Service can do. It is, after all, one of the most remarkable physical systems ever created. With arms in every single zip code, from Key West, Florida, to Utqiagvik, Alaska, its expansiveness opens up a world of opportunity.

In many American communities, the post office was historically called the “federal building,” and it served as a one-stop shop for numerous governmental needs. (Tellingly, FDR wanted Social Security to be administered through posts to assure its accessibility.) In smaller towns and cities, for example, the post office was a focal point for immigrant registration, military recruitment, and distributing income tax forms. There is no reason that America’s post offices can’t again provide a variety of important governmental functions. Indeed, today’s post offices should have all tax forms readily available. The government should even consider stationing IRS adjutants at post offices around tax time, which would ease what is, for many Americans, one of the most stressful times of
the year.

The Postal Service could also expand on the passport assistance it already provides. Many post offices take passport photos and process some first-time applicants and renewals. Often, this is by appointment only. I believe that post offices should offer full passport services to any American who walks through the doors. In addition to serving as a gateway to America’s bureaucracy, the post could serve as a door to the rest of the world. 

State governments should take advantage of America’s postal infrastructure as well, in particular by expanding the use of vote by mail, which when done right is proven to increase political participation. Turning mailboxes into voting booths would therefore be good for the engagement of our citizenry. The post could further weave itself into American democracy by allowing congressional representatives to station their district staff right in community post offices.

But perhaps the most promising service that post offices could provide is banking. Today, sixty-eight million Americans, more than a quarter of U.S. households, lack access to adequate banking services. Many are shut out by high fees tied to minimum balances, overdrafts, direct deposit penalties, and ATM charges. As a result, they are left to unregulated payday lenders and check cashers that level obscene annual percentage rates. The postal inspector general found that underbanked Americans spend $89 billion each year on financial fees. This closed system shackles families to poverty, further cementing the economic inequality tearing our country apart. 

Postal branches could offer a range of banking services—including savings accounts, deposit services, and even small lending—at a 90 percent discount compared to what predatory lenders provide, according to a report commissioned by the USPS inspector general. This would give many families an average savings of $2,000 a year while putting nearly $9 billion into the post’s coffers. 

Postal banking could even unite liberals and Trump supporters. Rural communities are America’s most bank starved: 90 percent of zip codes lacking a bank or credit union lie in rural areas. Bank branches are also sparse in poorer urban areas, and 46 percent of Latino and 49 percent of African American households are unbanked. The Postal Service is well positioned to help both communities. Some 59 percent of post offices lie in “bank deserts,” or places where there is no more than one branch. Where financial institutions close their doors to these communities, post offices remain open to anyone who walks inside. And this change wouldn’t even need the approval of Congress, requiring only the postmaster general’s consent. Pilot programs could then begin immediately—including in places like 194 Ward Street in my own city of Paterson.

Ultimately, these reforms would expand on the post’s democratic tradition. For centuries, the agency has connected far-flung parts of the country at little cost. Letting it help citizens pay their taxes, obtain passports, vote, and bank would better connect Americans with their federal government. In doing so, these reforms could help mend our citizenry’s chronically low confidence in the federal government. They could also make the agency’s contribution to public life—already enormous—more visible to the people it serves. And that would make it more difficult for anti-government zealots to tear the agency apart.

Bill Pascrell Jr.

Bill Pascrell Jr. was elected to Congress in 1996. He represents New Jersey’s 9th Congressional District.