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Op-Ed: Overlooked postal 'reform' provision
spells trouble for USPS
[The Center Square] Ross Marchand |
Taxpayers Protection Alliance
The United States Postal
Service (USPS) isn’t exactly known for its financial acumen. The agency
has lost more than $90 billion over the past 15 years, including nearly
$15 billion since the start of the pandemic. Delivery speeds have
rebounded since the middle of 2020 and the agency has an historic amount
of cash-on-hand, but leadership has failed to stop the fiscal bleeding.
And now, lawmakers are set to make things even worse by passing the
deeply misguided H.R. 3076, the Postal Service Reform Act of 2021. This
bundle of changes would shift retirement costs around and put the USPS
on the hook for ill-defined “nonpostal services.” Congress should steer
clear of H.R. 3076 and work toward genuine postal reform. |
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 The Postal Service Reform Act would change plenty about how the
USPS operates. The most widely discussed change is the “integration” of retiree
health benefits into Medicare. The legislation would split the existing Federal
Employees Health Benefits (FEHB) program, which covers about 8 million federal
and postal workers, retirees, and family members, into two. Out of this divorce
would emerge a new general FEHB and a separate Postal Service Health Benefits (PSHB)
Program linked financially to the Medicare program. Virtually all USPS employees
would eventually be covered by Medicare, absolving America’s mail carrier of
considerable healthcare costs.
This “reform” does little, though, to actually save taxpayer money. It merely
shifts a costly burden from one federal agency to another. Medicare expenditures
now total more than $800 billion per year, and the program’s main trust fund is
expected to hit insolvency by 2026. Adding postal retirement liabilities onto an
already-bloated program seems like an odd way to keep costs under control.
The grand Medicare “fix” receives far more attention than an even more alarming
provision of the postal proposal.
Section 103 of the act authorizes the USPS to “establish a program to enter into
agreements with an agency of any State government, local government, or tribal
government to provide property and services on behalf of such agencies for
non-commercial products and services...” The limited-sounding scope of the
provision seems to rule out the possibility that the USPS will take up banking
(which many agency watchers reasonably feared).
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In reality, the legislative language gives the USPS
wide license to dabble in banking and other problematic endeavors.
To see how, consider that states such as New Jersey and California
have been toying around with the idea of opening public sector
banks. In 2019, California Gov. Gavin Newsom (D) signed into law a
bill allowing counties and cities to create their own financial
institutions that could take deposits and facilitate certain
low-interest loans. And, New Jersey has been busy studying the
implementation of its own public banking initiatives.
One problem for public officials is cost. If
taxpayer-funded banks provide inexpensive financial services, that
money must come from somewhere. Enter the USPS, which can grab
taxpayer subsidies and low-interest Treasury loans if it fails to
balance its books. If H.R. 3076 becomes the law of the land, expect
states and localities to try and partner up with the federal agency
to provide ostensibly “non-commercial” financial services. And, if
the USPS’ check-cashing pilot is any indication, expect that effort
to end in disaster.
If lawmakers really want the USPS to get back into the black,
they’ll need to push the agency to focus on its core strength ...
delivering the mail. This will mean adequately pricing packages to
ensure that artificially cheap parcels don’t swamp mail volumes and
slow down mail delivery. There’s some promising language in H.R.
3076 ordering the Postal Regulatory Commission to review how
products are priced. But, this will accomplish little if all the
other problematic provisions become law. The USPS can continue
delivering for the American people, but only if lawmakers avoid the
misguided policies contained in postal “reform” legislation.
Ross Marchand is a senior fellow for the Taxpayers Protection
Alliance. |
