President’s Postal Task Force Report: “The Good, the Bad and the Ugly”

On December 4, the President’s Task Force on the United States Postal System finally released its assessment and recommendations regarding changes to the United States Postal Service and the nation’s postal system. The report had been provided to the President back in August.

The 69-page document recommends a reformed USPS business model, with more cost efficiencies and a reduced universal service obligation, and added reliance on private competitors to meet the nation’s communication and commerce needs. The report favors the retention of the comprehensive USPS delivery network, but would loosen the delivery and mailbox monopolies and provide greater advantage to the Postal Service’s competitors.

The report’s 25 recommendations, 15 for implantation by the Postal Service and Postal Regulatory Commission, and the remainder for Congressional approval, do not call for privatization of the Postal Service but represents a glide path for transition to a privatized Postal Service. In that context, there are recommendations that are good, others that are bad and some that are ugly.

The Good
The Task Force recognized the reliance that rural America and outlying communities have on the U.S. Postal Service and the necessity of preservation of the comprehensive postal network without undermining its use to rural residents and businesses. The report also notes the 7 current vacancies on the Postal Board of Governors to exercise the Board’s important strategic planning and governance responsibilities. Also, the Task Force suggested that the Postal Service explore and implement new products and services that generate revenue, and co-locate complementary retail establishments within existing postal facilities. Finally, the Task Force suggested that the Postal Service’s retiree health liability be re-amortized and re-calculated using actuarial data limited to current retirees and employees near retirement, rather than all postal employees and retirees.

The Bad
There are also recommendations that are problematic. The Task Force urged the Postal Service to expand contracting-out postal operations, including retail service, mail acceptance and mail processing. And it recommended the pricing of competitive products, such as small parcels, bear a significantly larger portion of the Postal Service’s overhead costs, a view consistent with United Parcel Service’s agenda and the President’s view regarding Amazon. This recommendation sets the stage for a full frontal pricing assault on package shippers through pricing that captures the greater costs associated with financing of the Postal Service’s “Universal Service Obligation” (USO), capital expenditures and long-term liabilities. This new burden would result in escalating prices for parcels and items originating or delivered to rural and outlying areas. Also, the Task Force would restrict the scope of the USO to those postal products and services deemed to be “essential” versus types of mail and packages deemed “commercial” and without government protection.

The Ugly
Finally, there are recommendations that upend the Postal Service’s historic role as a government-reliant contributor to commerce and communication throughout the nation. The Task Force recommendation that delivery mail boxes be opened up to private-sector competitors through licensing agreements raises a host of policy, privacy and operational concerns, as does the conversion of more post offices into privatized contract units. The Task Force’s recommendation that the USO be narrowed and defined by the content of the mailed item and that access to a government-operated postal retail facility be limited raises concerns about the affordability and accessibility of the nation’s postal system. The Task Force’s recommendation that postal services be reduced, along with delivery days, disregards steadfast directives of Congress for decades. Similarly, the changes recommended by the Task Force in the Federal Retirement System, in which USPS employees participate, to increase employee contributions and to convert, where possible, to a defined contribution system would generate strong resistance in Congress.

NAPS will be working with Congress and postal policy-makers to help implement the good, but reject the bad and the ugly.