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Not All Neglect Is Benign

USPS truck in motion
photo by Paul Sableman

Pity the poor U.S. Postal Service. Not only does it get no respect, it doesn’t even get leaders who might try to fix some of its many ills.

The Postal Service has enough problems without being forced to operate on autopilot. But the fact that it has not a single member currently serving on its board pretty much symbolizes the less-than-benign neglect the mail is getting from federal policymakers.

The Wall Street Journal recently reported on the circumstances leading to nine vacant seats on the Postal Service’s governing board. None of former President Obama’s five nominees made it through the Senate approval process – and while there was no shortage of enmity between the president and congressional Republicans in 2016, it was Vermont’s Sen. Bernie Sanders (an independent who is more Democrat than many Democrats) who effectively blocked Obama’s picks. President Trump has nominated three candidates, but even if the Senate gets around to confirming them soon, which is not at all a sure thing, the board needs at least four members to have a quorum for meetings.

In the meantime, some powers have been delegated to the postmaster general and her deputy. But many key operational decisions must remain on hold until enough governors are in place to make them.

It isn’t just that legislators have too much else to do, although constant political infighting and a Democratic policy of slowing virtually every appointment in this administration hasn’t helped. And it isn’t just that the inexperienced Trump camp never really gave a thought to the postal service before his inauguration, and that many of the president’s thoughts about it since then are ill-informed. Both of these are factors, but I don’t think either is the main explanation.

The main explanation is that USPS inevitably has to make some tough choices that are bound to be unpopular, and nobody in either Congress or the White House is eager to see those choices get made right now. Or ever.

The big issue is that USPS remains too large for its current mission. It actually had more vehicles in its fleet in 2016 than it did in 2007, even though mail volumes have crashed in the interim. As of last fall, that volume continues to decline. The Postal Service has nearly as many “retail offices” – known as post offices to you and me – as it did a decade ago, even though most people almost never need to go to a post office in person; not only is mail volume reduced, but many of the reasons people formerly visited post offices are now easy to take care of through the USPS website or its app. P.O. boxes, one of the last remaining reasons to regularly visit a post office in person, could easily be relocated to many local strip malls and handled in the private sector. (UPS and other vendors already offer private mailbox services.)

My colleagues and I have written about the Postal Service’s woes for nearly a decade. As Paul Jacobs pointed out in 2011, “Part of the problem is that the USPS occupies a strange middle ground between a public service and a profitable business.” If it is to be run more like a public service, legislators need to make hard choices about a fiscally responsible way to run the enterprise. And if they want USPS leadership to be the ones to make those hard choices, legislators need to approve appointments, and the president needs to fill the rest of the governing board.

But no elected official wants to cut back on post offices, or six-day delivery, or flat-rate postal rates regardless of distance or volumes, or retirement benefits to mail carriers. None of which the Postal Service can afford to maintain now, and none of which are apt to ever be affordable in the future. The service’s leaders have asked to reduce or eliminate these burdens for years, but Congress has consistently said no. For example, a 2006 law mandating that postal retiree health benefits must be funded for 75 years upfront imposes billions in costs. As a result, if the government called in its debt from USPS, the outfit would immediately file for bankruptcy, if it could. Taxpayers are on the hook anyway, so the longer the situation persists, the deeper the hole gets.

That’s OK with Congress and, apparently, the White House. Hardly anyone is looking down into that deepening hole. The president fantasizes that package delivery is going to save the mail system, if USPS would just raise its rates high enough, especially for Amazon. Congress simply ignores the problem. I can’t see how one mistake is any better than the other.

Larry M. Elkin is the founder and president of Palisades Hudson, and is based out of Palisades Hudson’s Fort Lauderdale, Florida headquarters. He wrote several of the chapters in the firm’s book, Looking Ahead: Life, Family, Wealth and Business After 55. His contributions include Chapter 1, “Looking Ahead When Youth Is Behind Us” and Chapter 4, “The Family Business."

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