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No Surprise – The Trump Administration Wants to Privatize the USPS

Posted by Mark Fallon on Jun 25, 2018 1:36:36 PM

On June 21, 2018, as part of a plan to overhaul the federal government, the Trump Administration proposed to restructure and privatize the US Postal Service (USPS). The report, entitled “Delivering Government Solutions in the 21st Century,” was released by the Office of Management and Budget Director, Mick Mulvaney.

This announcement comes almost 2 months before the scheduled release of the report from the president’s Task Force on the USPS. The Task Force was appointed by the president in April, and is headed by Director Mulvaney, Treasury Secretary Mnuchin, and Director of Office of Personnel Management, Jeff Pon.

Just a few weeks ago, industry professionals were complimenting the Task Force. Mailer organizations, USPS competitors and union representatives offered testimony. They were impressed with the Task Force staffers’ knowledge of the proposed reform legislation and felt that their concerns were being heard.

The staffers may have listened, but the June 21st announcement demonstrates that the conclusions have already been made. The Task Force hearings and testimony amount to no more than staged theater – viewers may feel like they’re part of the play, but the authors already know the ending.

Included in the move the to privatization, the report recommends that the USPS deliver mail on fewer days to fewer, centralized locations (not door delivery). The USPS has also promoted the move to cluster boxes, although hasn’t explained how packages will be handled. Add to that the push for next day and same day delivery for internet purchases, and this idea makes even less sense.

As expected, the report points to the models adopted by several European countries. The claim is that a privatized company will lower expenses. In reality, the other countries don’t see savings – but increased costs. The USPS has the lowest priced postage of all major countries. Here are the prices for one-ounce stamps:

  • US                    $0.50
  • Canada           $0.68
  • Australia         $0.78
  • Germany         $0.82
  • Great Britain   $0.85
  • France             $0.86

(Also, if the Europeans are correct on mail, are they also correct on universal healthcare, a stronger social welfare net and higher taxes?)

The USPS issued a lackluster response to the proposal. Postmaster General (PMG) Megan Brennan noted that the USPS has consistently pointed out the problems with the current business model. Instead of taking a stand against privatization, the PMG wrote “Ultimately, it will be for Congress to decide whether the best path to financial sustainability is to preserve the Postal Service’s status as a government institution focused on our mission of public service, while giving us more authority to meet our responsibilities, or whether a profit-maximizing corporate model is preferable.”

The June 21st report won’t immediately impact the USPS, as any changes require Congress to pass legislation. However, by taking the extreme view of privatizing the USPS, the administration may have further eroded any hopes for substantial postal reform in 2018. The House and Senate reform bills have been stalled for months. It would be surprising if leadership allowed bills contrary to the administration’s plan to move forward. Senator McConnell still hasn’t scheduled a vote on President Trumps nominees to the Board of Governors, even though the committee approved two of the nominations on May 7, 2018.

Meanwhile, the USPS will continue delivering the mail.

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