US Postal Service Would Get $25 Billion Lifeline Under Request Led By OC Rep. Mike Levin
Tuesday, June 16, 2020
The struggling United States Postal Service could get a $25 billion lifeline if the Senate approves an emergency funding request from a bipartisan group of 137 House members, led by Rep. Mike Levin of Orange County.
The federal bailout, which could be voted on as early as this week, is needed to offset losses triggered by the Coronavirus pandemic, which postal officials say will total more than $22 billion over the next 18 months and could force the 245-year-old agency to close for good.
“If Congress is unable to preserve this critical institution, it will severely impact our way of life, including putting the health and safety of older Americans at risk and disenfranchising millions of voters who are unable to vote in person,” states the letter from Levin, D-San Juan Capistrano, and 136 other representatives.
Much as it has for other struggling industries, the coronavirus pandemic has exacerbated problems that have plagued the U.S. Postal Service for years.
The agency, which was codified in the U.S. Constitution, lost $69 billion over the past 11 fiscal years — including $3.9 billion in 2018, according to the Government Accountability Office.
The first factor is an ongoing decline in demand for services, with a particular drop in junk mail as businesses shift to digital ads. Another is a change made 14 years ago, under President George W. Bush’s administration, that required the postal service to start prefunding its generous employee retirement benefits. Other rules make it hard for the agency to raise prices or cut expenses by, say, closing a little-used post office.
Add it all up, and the Government Accountability Office says the postal service’s unfunded liabilities and debt have grown to double its annual revenue.
Still, the USPS reported that revenue grew by $348 million in the first three months of 2020 when compared with the same period last year, an upturn that is at least partly connected to mailers for the 2020 U.S. Census.
But when the coronavirus pandemic hit, most business mail — which accounts for the bulk of the USPS service — stopped.
“While we continue to conserve capital and reduce expenses in areas where volumes are declining, our ability to continue to serve the nation will require substantial funding from the federal government or other sources,” USPS Chief Financial Officer Joseph Corbett said in May.
House Democrats pledged $25 billion to USPS as part of the $3 trillionHEROES Act, approved May 15 to buffer the economic fallout of the Coronavirus pandemic. But the GOP-controlled Senate has largely panned the bill, leaving it dead on arrival.
Some conservative Republicans have for decades supported privatizing postal services, as England and Germany have done.
President Donald Trump has called the USPS “a joke” and said he wouldn’t approve additional funding for the “mismanaged” agency. But he also tweeted, “I will never let our Post Office fail” and praised workers.
As word of the USPS struggles spread in the spring, people responded by launching petitions to save the postal agency and social media campaigns to get people to buy stamps.
This week’s letter, written by Levin and Rep. Brian Fitzpatrick, R-Penn., calls on Senate Majority Leader Mitch McConnell and Senate Minority Leader Chuck Schumer to approve $25 billion in grants for the postal agency.
The letter notes that USPS still handles roughly 48% of the world’s mail and states the agency is one of the largest employers of veterans, with some 650,000 employees.
A number of Southern California Democrats signed the bill, including Reps. Alan Lowenthal of Long Beach, Ted Lieu of Los Angeles, Lou Correa of Anaheim, Mark Takano of Riverside, Katie Porter of Irvine, and Harley Rouda of Laguna Beach.
Category: Economic News, Business News