January 09, 2018
Over the holidays, the president mentioned the Postal Service in the following tweet:
While it is clear that the intended target was Amazon’s founder Jeff Bezos (who is also owner of The Washington Post), what is less clear is the reason for the sudden interest in the pricing of packages. It’s probably because of recent media attention resulting from a policy campaign by the United Parcel Service (UPS).
For more than 40 years, UPS has been trying relentlessly to force the Postal Service to raise parcel rates. If successful, this effort would essentially drive business away from the Postal Service and result in more volume at higher prices and greater profits for UPS – good for its shareholders, bad for American businesses and households.
Unlike its competitors, the Postal Service already is required, by federal law, to make a profit on every package it delivers – including those for Amazon. Also unlike UPS and FedEx, the Postal Service is required by law to deliver to every address in the country six days a week.
If the president truly wants to make the Postal Service “smarter and richer,” he has the power to do so.
He can start by nominating a full slate of competent and qualified candidates to the Postal Service Board of Governors (BOG) and by filling a key vacancy on the Postal Regulatory Commission (PRC). While the vacant BOG is a problem President Trump inherited, as of today he has offered only three nominations for the BOG, even though all nine seats are vacant. Meanwhile, the PRC, which is central to the Postal Service’s ability to set postage rates appropriately, is missing its fifth member. Indeed, sensible postal pricing hangs in the balance right now at the PRC as it works to create a new postage rate-setting system.
If the president wants to ultimately raise rates, it can be done only with a functioning Board of Governors and a Postal Regulatory Commission at full strength.
Beyond making these nominations, the most important thing the president can do to make the Postal Service smarter and stronger is to remove the crushing financial burden placed on the Postal Service by the 2006 congressional mandate to pre-fund future retiree health benefits decades in advance, something no other public agency or private company is required to do. This policy change, which President Trump’s predecessor did not achieve, has bipartisan support. It would immediately restore the constitutionally mandated Postal Service to financial stability, enabling it to continue to serve 155 million businesses and residences six (and sometimes seven) days a week while continuing to provide the most affordable postal rates in the industrial world.