USPS warns it might have to shutter

by June as $2 trillion coronavirus

stimulus package provides no
funding
March 30, 2020 11,30 AM EDT

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Fifty years ago, a postal worker strike halted mail delivery. The eight-day strike,
carried out by 150,000 letter carriers across 30 cities, prompted then-
President Richard Nixon to declare an emergency and send in the National
Guard to deliver mail.

“The United States Postal System is a vital element of our entire

communications system. The poor depend heavily upon it for medical services
and also for government assistance,” Nixon said in an address to the nation.
“Veterans depend on it for their compensation checks. The elderly depend on
it for their Social Security checks.”

Today, the Postal Service is just as essential: It delivers about 1 million

lifesaving medications each year and serves as the only delivery link to
Americans living in rural areas. Working with other delivery services like UPS,
the agency supports $1.7 trillion in sales and 7.3 million private sector workers
year, and this year will prove essential to delivering the 2020 Census to
citizens as well as any vote-by-mail initiatives. The USPS is the federal
governmentʼs most favorably viewed agency, with an approval rating of 90%.

Yet once again, the USPS is in crisis mode.

Without government intervention, the post office is facing the same hurdle as
other businesses are right now: Thereʼs not enough cash to keep operations
going.

First class and commercial mail volume, which brought in about $41 billion in
revenue in fiscal year 2019, has dropped at a rapid clip since the virus spread
across the U.S., according to the Postal Service. This downward trajectory is
expected to continue, with mail volume falling lower than it did during the
1930s Depression. USPS estimates total revenue losses between $8 billion
and $17 billion between now and the end of fiscal year 2020 as a result of the
crisis.

While package delivery has increased during the crisis, “revenue growth in our
package business will never be enough to offset imbalances in the Postal
Serviceʼs business model,” said Postmaster General and CEO Megan Brennan
in November.

But the USPS has also been hemorrhaging money, largely owing to a piece of
2006 legislation, championed by the George W. Bush administration and
congressional Republicans, that requires the Postal Service to pre-fund all
future retiree health benefits, amounting to at least $5.5 billion annually. That
edict, according to Brennan, has led to 80% of the agencyʼs losses. As a result
of the lack of revenue, the Trump administration has suggested on multiple
occasions that parts of the postal service be sold to private industry.

While the post office has not been funded by taxpayer dollars since the early
1980s, some in Congress—on both the left and the right—pushed for a bailout
of the Postal Service as part of the recently passed $2 trillion stimulus
package, the largest relief package in U.S. history. The original House bill
included a $25 billion appropriation intended to help fund the agency and
eliminate its $11 billion in outstanding debt. The measure would also eliminate
the USPSʼs $3 billion annual borrowing cap.

While the plan passed through the House, the Republican-majority Senate
rejected the funding, and the final bill, signed by the President on Friday, only
granted the USPS access to a $10 billion Treasury loan—no direct cash.

“A collapse of the Postal Service at this crucial moment would severely

undermine both our fight to defeat the COVID-19 virus as well as the effort to
stabilize our economy,” said the National Association of Letter Carriers, a
postal worker union, in a statement.

Just last week, President Donald Trump said that the Postal Service was
essential to keeping goods flowing to households who were self-quarantining.
In many areas of rural America, the USPS is the only mail option and provides
last mile delivery for private companies. That means that the Postal Service
alone will have the ability to adequately distribute the individual stimulus
checks that Congress approved for Americans in the bailout package.

“Republicans pressed for hundreds of billions of dollars in massive bailouts to

all kinds of large businesses and corporations, including $17 billion to Boeing
and other companies. Yet they refused to give the Postal Service anything but
increased borrowing authority,” said Maloney. “The White House and Senate
Republicans…have wanted to privatize the Postal Service for years, but
exploiting the coronavirus crisis in order to do so [is] a new low.”
In total about $500 billion was handed out to private corporations, with no
money going to the Postal Service.

A closure of the Postal Service is uncharted territory, but itʼs not impossible,
said USPS spokesman David Partenheimer in a statement. “The Postal Service
remains concerned that this measure will be insufficient to enable the Postal
Service to withstand the significant downturn in our business that could
directly result from the pandemic,” he said. “Under a worst-case scenario,
such [a] downturn could result in the Postal Service having insufficient
liquidity to continue operations.”

The USPS currently employs about 630,000 workers, and without funding
there could be massive layoffs and the closing of certain offices in rural areas.
Congress could also mandate that certain parts of the service be sold to
private industry, as the Trump administration has suggested on numerous
occasions.

“What would happen tomorrow in the wake of this pandemic if the Postal
Service announced tomorrow that they were going out of businesses and they
were laying off all their workers?” Rep. Gerry Connolly (D-Va.) asked in a
statement.

There is talk of a fourth stimulus package, and Mark Dimondstein, president of

the American Postal Workers Union, which represents about 250,000 postal
workers, is holding out hope that there will be some support included in the
next round of funding.

“Itʼs absolutely necessary that it include funds—as House proposals earlier

this week did—to keep the mail and e-commerce moving until the economy
begins to recover,” he said in a statement. “Simply having access to more debt
from the Treasury—at the Secretaryʼs discretion—as included in the third
stimulus, is an inadequate solution.”

The Postal Service Board of Governors will convene in a virtual meeting on

Wednesday, where they are expected to discuss borrowing more money and
how they intend to stay afloat amid COVID-19.

Postal employees are considered essential and will continue to work as the
virus spreads across the country.

“Itʼs outrageous that the stimulus bill passed by Congress doesnʼt include any
financial support for the USPS, including needed funds to provide for the
safety of workers and the mailing public,” said Dimondstein.

As of Friday, the USPS confirmed that 111 of its employees had tested positive
for COVID-19. In a letter to its 270,000 members, the National Association of
Letter Carriers noted that it had received at least 3,000 complaints from postal
workers who did not feel as though their safety was being taken seriously.

Correction, March 31, 2020: A previous version misstated the 2019 revenue
for first class and commercial mail.

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