The Postal Service collapse that isn’t happening

There is great news for the chorus of leading House Democrats and special interests who have been squawking for the past month that the U.S. Postal Service will be broke and chaos will ensue just before the election: It’s not going to happen!

The Postal Service itself just made this clear. In a May 8 legal filing about its finances the Postal Service says it “expects that it will have sufficient liquidity to continue operating through at least May 2021.” Also, during a public webcast about its finances the same day, the Postal Service’s most senior officials gave no indication of a shutdown by October.

A big reason is the CARES Act increased the Postal Service’s borrowing authority by $10 billion. That gave the Postal Service $23 billion in available cash at the start of the pandemic. And while the mail business is hurting, the package business is up sharply.

Far from satisfied, House Democrats called for $25 billion in unrestricted assistance for the Postal Service in legislation introduced this week.

Rep. Carolyn Maloney (D-N.Y.), chair of the House Committee on Oversight and Reform which has primary jurisdiction for postal legislation, said in an April 10 press release, “The Postal Service is holding on for dear life, and unless Congress and the White House provide meaningful relief in the next stimulus bill, the Postal Service could cease to exist.”

A week later, in a campaign fundraising letter, Maloney said (bold in original), “I’ll be blunt: without help from Congress and the White House, USPS will not survive the summer.”

Rep. Gerry Connolly (D-Va.), who chairs the subcommittee responsible for postal matters, tweeted April 9, “The Postal Service will collapse without intervention, and it will happen soon.”

Financial problems at the Postal Service predate COVID-19. The U.S. Government Accountability Office (GAO), Congress’s independent financial watchdog, made this abundantly clear in its own May 8 report.

“Since GAO’s 2009 high-risk designation, the U.S. Postal Service’s financial viability has progressively worsened due to declining mail volumes, increased employee compensation and benefit costs, and increased unfunded liabilities and debt,” says GAO.

The Postal Service has not eliminated unprofitable areas, as foreign postal services and business entities have, “because it has been unable to reach an agreement with stakeholders, including Congress, on what actions to take.”

Congress has a year to take those actions before the Postal Service is out of cash. Key steps include defining the core mission, or Universal Service Obligation, and how to pay for it and restructuring the retiree health benefits program. There are 20 other options for improving the Postal Service through operational and strategic alternatives discussed in a December 2018 Presidential task force report.

House Democrats have yet to hold a hearing on that report. In the current Congress, the House Oversight and Reform Committee has held just one postal hearing – on April 30 last year. Rep. Mark Meadows (R-N.C.), now the president’s chief of staff, was critical of the Postmaster General for not providing a business plan to turn around the Postal Service. He was supported by Rep. Elijah Cummings (D-Md.), then the committee chair.

Democrats trying to ram through $25 billion in unrestricted funds to the Postal Service is a waste. Such assistance takes the focus away from needed reforms.

The negligence of Democrats in not addressing postal reform since 2018 is compounded by this audacity and melodrama. The Senate and the administration should oppose this $25 billion boondoggle which shows Washington at its worst.

Paul Steidler is a Senior Fellow with the Lexington Institute, a public policy think tank based in Arlington, Va.