Why We Are Still Talking About the USPS Going Broke

Well, we may not have significant postal reform legislation yet, but we could see some nifty infrastructure updates like e-cars and building upgrades, according to Jory Heckman writing in Federal News Network.

“Lawmakers haven’t made much ground on passing long-term postal reform legislation,” Heckman writes, “but House Democrats passed a $1.5 trillion infrastructure-spending bill Thursday that would give the Postal Service $25 billion to modernize postal infrastructure and operations. The bill specifies that $6 billion of that money would go toward buying a delivery vehicle fleet.

“The Moving Forward Act,” he continues, “would require USPS to replace its fleet of Grumman Long-Life Vehicles with at least 75% ‘electric or zero-emission vehicles.’”

Other requirements in the legislation include:

• An agency mandate to make at least 30% of its medium and heavy-duty vehicles zero-emission or electric by 2030; and
• A ban on buying any new non-electric or non-zero-emission vehicles by 2040.

According to Rep. Peter DeFazio (D-Ore.), the chair of the House Committee on Transportation and Infrastructure, the spending bill is needed to keep the mail flowing safely and efficiently.

“The Postal Service is [meeting their mission] in 35-year old delivery vehicles,” DeFazio notes. “They’re decrepit and incredibly expensive to maintain. This would help them buy a new fleet and help them get through this crisis.”

The crisis he refers to is, of course, the Postal Services’ projections on how quickly they might run out of money without long-term reform. They now say they have enough cash to keep operating through the end of this year, a rosier if still dire prediction from a few months ago.

(Just to put this in perspective, a year ago word had it the USPS would go broke in five years without meaningful reform. Now we are talking in terms of months.)

It’s interesting to note that under normal circumstances, the USPS doesn’t receive annual funding from Congress – and there are many in the House who feel it shouldn’t now, including Rep Jody Hice (R-Ga.) who proposed an amendment that would strip USPS funding from the bill. (This amendment was rejected.)

“The reality is that over the last several months, the revenue trends no longer support the Postal Service’s multi-billion-dollar bailout request. This is because there’s much better numbers on performance that’s been driven by package volume,” Hice said.

The Postal Service does have access to a $10 billion loan thanks to the CARES Act and are currently negotiating with the Treasury Department over terms.

Meanwhile, neither side of the aisle seems willing to dig in and do the hard work of Postal Service regulation reform that might serve to untether the USPS from the archaic system it now operates under and begin to resolve its financial challenges in ways that serve its customers better and ensure long term solvency.

That’s the real work that needs to be done.