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The Biggest Threat in the Postal Report Is to Rural Americans, Not Amazon

The Trump task force's recommendations would undermine the agency's mission to bind the country together.

Brett Carlsen/Getty Images

On Tuesday, President Trump’s task force on the U.S. Postal Service’s troubled finances released its report on the future of the agency. The word “Amazon” appears nowhere in the body of the report, only in an appendix listing organizations that provided input. But virtually every article about the report led with the possibility that Amazon would have to pay more to use the USPS for package delivery.

“Postal report puts muscle behind Trump’s Amazon grudge,” Axios blared. “Postal Service Review Proposes Sweeping Changes Likely to Hit Amazon,” said The Wall Street Journal. “Postal service should be allowed to charge more for packages, review following Trump spat with Amazon finds,” CNBC reported.

This response is understandable, given that Trump ordered the creation of the task force shortly after alleging that Amazon was taking advantage of the Postal Service. But the impact on Amazon is not the most important piece of this study. The task force did not recommend selling off the Postal Service, as some feared it would. But it did suggest a radical change that would separate the Postal Service from its core mission: to provide unfettered access to communication and commerce to all citizens, regardless of who they are or where they live. Such a change would be an attack on the individual freedom of all Americans, but especially those in poor, rural communities.

The USPS was established in the Second Continental Congress of 1775, before there was a United States. For nearly 250 years, its operations have been guided by the universal service obligation. This guarantees regular postal service to every American residence and business at a standard, affordable price. It includes six-day delivery and post offices within every zip code. No area of the country is discriminated against, no matter how costly or difficult to reach. The universal service obligation is funded by giving the USPS exclusive access to the mailbox and a monopoly on letter delivery.

The statutory language says the intent of the universal service obligation is to “bind the Nation together” with “prompt, reliable, and efficient services to patrons in all areas.” Before the digital age, access to the postal service equaled access to information and the ability to conduct commerce. If a black family was restricted from shopping at a department store, they could use the Sears & Roebuck catalog and have goods delivered to them. If an engaged citizen wanted to learn about their democracy, the reduced rate for media mail gave them that opportunity. In short, the USPS was about connecting the country.

In the Internet age, it’s easy to scoff at the USPS. But it still serves a critical function, particularly in rural areas where the digital divide still looms. There’s no question that e-mail has damaged USPS finances, although not as much as a crippling rule established by Republicans in 2006 that requires the agency to pre-fund its retirement and health benefits for the next 75 years, therefore reserving funds today for future workers who aren’t even born yet.

The task force report doesn’t recommend ending this pre-funding, yet it proceeds from the premise that the Postal Service must make money. The USPS “is on an unsustainable financial path,” the authors write, with package volumes from e-commerce unable to replace declines in letter mail. To remedy this, the report seeks reforms to the USPS business model.

That includes messing with the universal service obligation. The USPS “must distinguish between the types of mail and packages for which a strong social or macroeconomic rationale exists for government protection in the form of price caps and mandated delivery standards (‘essential services’), versus those types of mail and packages that are commercial in nature, and therefore would not have a basis for government protection,” the task force writes.

In English, that means degrading the universal service obligation. Essential services, as defined by the task force, would include personal correspondence, financial transactions like bill-paying, government mail, and transport of pharmaceuticals. Everything else, like commercial packages, would be inessential, and subject to increased postage rates. This is what’s considered the shot across the bow at Amazon.

But under this standard, the USPS could also discontinue the delivery of “inessential” packages or mail that is unprofitable; the task force calls it “exit[ing] the business line.” Post offices that are costly to maintain could be closed more quickly; the task force wants to give the USPS more “flexibility” in this area. “Speed of processing” mail could be slowed. Saturday delivery could even be stopped.

The task force writes that it “strongly believes that any potential solutions considered should not disadvantage those living in rural or remote locations,” but it seems clear that this would be the effective result of degrading the universal service obligation. Not only would poorer postal customers in rural America bear the brunt of higher rates and slower service on “inessential” deliveries, and less profitable rural post offices targeted for closure, but rural America would also likely be singled out for extra costs. We have the experience of FedEx, which adds a “Delivery Area Surcharge” to harder-to-reach zip codes. The task force report represents a gateway for USPS to do the same thing. To discriminate based on geographic location would grossly undermine the USPS mission to connect all Americans.

The task force’s discussion of how the USPS can raise revenue is likewise wrongheaded. Recommendations include having the agency charge rival shippers for access to post office boxes, and selling hunting and fishing licenses. But it drew the line at postal banking, a proposal for the USPS to give all citizens access to simple bank accounts. “Expanding into sectors where the USPS does not have a comparative advantage or where balance sheet risk might arise, such as postal banking, should not be pursued,” the task force states.

Access to the financial system for the millions of people without a bank account also fits squarely within the USPS mission. The comparative advantage is clear in the breadth of USPS infrastructure, with over 31,000 locations nationwide. This is why the USPS did, in fact, provide simple bank accounts from 1911-1967, and why postal agencies in dozens of countries around the world do so as well.

The task force’s report may not call for outright privatization, but it embraces its logic by prioritizing cost-cutting—even calling for the elimination of collective bargaining for the USPS’ unionized workforce. But that’s not why the country established the Postal Service. It did so to build a cohesive, successful country in which Americans have fair and equal access to each other. Instead of figuring out how to live up to this commitment, the task force would rather undermine it.