Sabotaging Government to Prove Government is Broken
How the USPS has become the poster child for the Republican idea of a broken big government, while Americans get screwed.
The Republican Party over several decades has marketed itself as the party of smaller government. Take away unnecessary federal overreach, give it back to the states, and everything will work out for the better. In many cases, we know that turns into an inequity among poorer and richer states. What happens when you can’t prove the idea works? You literally break the system to prove that it is broken.
Modern Republicans can no longer even claim to be a party of small government. They would like to be a party of small government of certain things — such as social services, healthcare, education, and other social pact benefits. At the same time touting smaller government, those same elected officials continue to lower tax revenue from the wealthiest Americans and corporations, while increasing federal spending to a record deficit and record national debt.
In the attempt to “drain the swamp”, the Trump administration has thickened the muck in an effort to enrich themselves personally. One notable institution that has found itself the next target of private enrichment is the US Postal Service. The GOP has been working on a way to privatize our mail delivery services for years, but Trump is the first to openly attack it from the broadside. So how did we arrive at a place where we are arguing over mail box locations and mail ballots?
The sabotage of the USPS goes back much further than Donald Trump. Like a slow drip in a leaky pipe destroying your dry wall, it started with Richard Nixon.
By the time Nixon was President, the United States Post Office Department (USPOD) was a nearly 100 year old federal government department formed in 1872, with its own Presidential cabinet level position in the Postmaster General (PMG) since 1829. The PMG itself was created in 1775 by the Continental Congress, giving the job to Benjamin Franklin. During that time, the PMG was appointed by the President with advice and consent of the US Senate, and held a powerful position within not only the cabinet but as the head person in charge of the ruling political party’s patronage of handing out government jobs to supporters. The PMG also ruled over the largest employer in the country (currently just under half a million), before things like WalMart existed. There was so much faith in the postal service institution that it also operated as a savings bank from 1911 to 1967, paying out 2% interest to customers.
While the USPOD provider cheap mail services and safe banking to citizens, by 1970 it was not paying its employees enough and having them work in poor conditions. As federal employees, even with union representation, they could not engage in collective bargaining or strike. According to the AFL-CIO, full time employees were starting at $6176 annually, but after 21 years of service were making $8442 — which amounts to less than a 1.75% raise per year, not even covering US inflation rates most years. Congress had just given itself a 41% pay increase in 1969, while continuing to kick the can on postal worker pay increases (does this sound familiar, minimum wage earners?). By 1970, they debated a 5.4% increase, which also did not cover inflation, and ultimately approved only 4%. New York City workers ultimately voted to defy the law and strike in March 1970. By the following week, over 200,000 postal workers walked off the job across the country.
After Nixon realized the 23,000 National Guard members he sent to New York City to process and deliver the mail had no idea what they were doing, since you can’t shoot an envelope, the government realized it was in no position to take a hard line stance. The USPOD negotiated postal workers back to the job within a month with a 6% pay increase. Congress and Nixon also gave an additional 8% increase that summer, but at a price that haunts us today.
The Postal Reorganization Act of 1970 was passed overwhelmingly in the House and signed into law by Nixon by August. Postal workers got their much deserved raises. They got their right to collective bargaining, but were still prohibited from striking. The USPOD also ceased to exist as a federal department. The newly created US Postal Service (USPS) would act as a independent corporate agency under the Executive Branch, but continuing to deliver the mail and meet its goals under Title 39 of the US Code. Operational authority was moved from Congress and given to a Board of Governors and USPS management. The new USPS also would not receive any tax dollars. It would be meant to fund itself through its business. It sounds harmless enough. Americans already needed to send mail and paid to do so. Why fund it through taxes too? Just run it like a business, because capitalism always works. And if rates need to be increased, the Republicans could just blame “greedy unions and labor costs”. Small government to the rescue!
The new USPS system seemingly worked well for a while. Postal service revenues covered its expenses. Congress only appropriates $90 million on average to the USPS, to compensate them for providing free services to the blind and overseas voters — a drop in the bucket of around .1% compared to its total annual revenue.
The USPS even made net profits up to 2006. And it has been down hill ever since. With ever increasing usage of the internet, consumers have relied far less on first class mail via the USPS, which was their main profit generator. Declines in periodical delivery have been even steeper. Total mail volume is down more than 31% since 2000. As a result, total revenues have fallen year over year, or stagnated. Even with revenues greater than that of Intel, expenses are not being covered, resulting in losses totaling over $83 billion since 2006. It would be even worse, if not for the increase in package delivery volumes.
To add to the problems, Republican “small government” ideas kicked the USPS in its nether regions starting in 2006 with a new law requiring retiree health benefits be pre funded by at least $5.5 billion per year. The USPS began defaulting on those prepayments starting in 2012, in order to cover expenses of paying employees and operations in general. The law also tied the hands of the USPS by not allowing postage rate increases higher than that of inflation, along with a delivery mandate of 6 days per week. Management has asked Congress to force retirees onto Medicare, so they no longer have to fund retirement health benefits, but there has yet to be any change. More people on Medicare is contrary to the Republican “small government” ideal. Showing the USPS as a failed business is exactly what they do want however.
“Look, look! The USPS is a bad business that wastes money! Kill it! Privatize it and charge Amazon more money!” That has basically been the talking point of the last couple years under Trump. Jeff Bezos is his personal devil, and of course Amazon business helps the USPS revenues. Trump and his super high-IQ business people also fail to realize both UPS and Fedex rely on the USPS to deliver their packages with final mile programs, at a break even operation for the USPS. If the USPS raises rates substantially, or at worst fails completely, it not only affects the American people, it affects those private corporations bottom line. Throw in an election that Trump could lose, then they can use the dismantling of the USPS operations and fixing a “broken business model” as a cover for election fraud.
The other major issue if the USPS fails or continues to reduce staff numbers, is it would take away good paying jobs from ethnic minorities, women, and veterans. The USPS is one of the few places that someone without a college level education can make a living wage. Entry level employees start around $30,000 and can make as much as $70,000 after a long period of service — much like some white collar jobs. The USPS employs a higher percentage of black workers compared to the national workforce. In some states and DC, the ethnicity differences are substantial. It’s been an employer of black Americans since just after the Civil War ended.
2020 is the culmination of a variety of factors for the US postal system, including an unforeseen pandemic. But it is hard to deny that the end result is due in part on a 50 year vendetta of the Republican Party against the notion that the federal government should provide a service to the people, even if it results in a financial loss. It is unlikely the same people who hate cheap mail are looking as closely at financial statements of the Department of Defense, whose annual budget is now $721.5 billion (FY2020) — the highest in US history. You will only find the word “profit” 3 times in the 268 page financial report, none of which refer to any DOD profit.
The USPS is a service, just as our national defense, Social Security, and Medicare are services. Saving it from failure should not be a debate. This is when Republican ideas of small government can’t fix the problem. Privatization won’t save the day, nor will an ex-logistics manager trying to save cost without a comprehensive plan to overhaul the system. Congress and the President must step in and end the sabotage before it is too late.
