The Post Office Shouldn’t Be Profitable

By Max Tiefer

In the wake of Postmaster General Louis DeJoy’s massive cuts to the Postal Service’s effectiveness, much debate has arisen regarding potential reforms to the Postal Service. However, most of it has centered on profitability––the ability of the USPS to generate revenue. Indeed, the idea that the Postal Service should be financially self-sustaining has characterized the government’s policies towards it for several decades, including under the Obama administration.

However, this hasn’t always been the case. Prior to 1970, when President Nixon signed the Postal Reorganization Act, the mail had always been delivered by the Post Office Department, which was a cabinet agency led by the postmaster. The Founders had established the POD as a service for the American people in the Constitution, with no mention of profitability. This changed in the wake of the Act, which reorganized the POD into the USPS, a “corporation-like independent agency”.

Because the Act was written by a commission composed mostly of corporate representatives, the newly formed USPS was designed to act more like a self-sustaining business. Accordingly, Congress stripped the USPS of its taxpayer subsidies, which constituted 25 percent of its budget at the time. Less than a decade later, this interpretation of the post office as a corporation began conflicting with its mission of public service, as Congress proposed cost-cutting measures such as reduced delivery days (ironically, Rand Paul made a similar suggestion during DeJoy’s testimony). 

This tension only intensified towards the 2000s as Congress became more comfortable with viewing mail delivery as a profit-generating venture; when measured against private competitors (which began emerging in the late 1970s after Congress weakened the USPS’s monopoly), the USPS seemed inefficient in comparison. But what this criticism failed to take into account was that the USPS’s mission of delivering to all Americans made it fundamentally unprofitable.

Nonetheless, attacks on the USPS gained credibility after 2006, when a bipartisan Congress passed the Postal Accountability and Enhancement Act. This required the USPS to prefund retiree benefits, putting it into debt almost immediately. Nearly every call to dismantle or privatize the post office has cited its post-2006 financial losses, but few acknowledge that this deficit is not the result of mismanagement but rather of Congress’s own requirements for it. Instead, by presenting the USPS’s current model as unsustainable, reformers have argued for cuts to the postal service and reliance on private competitors. But because of the role the postal service plays in the lives of millions of Americans, a role which is too unprofitable for private companies to bother filling, these reforms come at the expense of vulnerable citizens, such as veterans (who rely on the mail to deliver their medications) and impoverished communities.

Now, we are witnessing the consequences of decades of post office commercialization: Congress is focused only on preserving the post office in a profitable form, with almost no mention of restoring it as an institution with a broad public mission. But delivering to every part of America is inherently unprofitable, and it is absurd to try transforming it into a money-making enterprise, something which would never be expected of any other government department. The only option is to make it a public good, and as long as the discussion focuses on how to profit from the postal service, the problems affecting it cannot be solved.

Title Image Credit: US Senate Committee on Homeland Security & Governmental Affairs via AP