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White House backs off privatizing the Postal Service

The Treasury Department released a ...

Posted: Dec 5, 2018 4:52 AM
Updated: Dec 5, 2018 4:52 AM

The Treasury Department released a long-expected proposal for overhauling the US Postal Service on Tuesday that stopped short of full privatization, an idea the White House floated over the summer.

President Donald Trump ordered the report in April after repeatedly attacking the Postal Service's deal with Amazon, which he said on Twitter was "making Amazon richer and the Post Office dumber and poorer."

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The 70 pages of recommendations do not directly address contracts with individual shippers, which are confidential. But if implemented, they may result in rate hikes for Amazon and other large e-commerce companies, which pay the Postal Service to deliver packages to remote places that may otherwise be too expensive to serve.

The Treasury-led task force, which included various agency heads, consulted with associations that represent the Postal Service's major users. They found little appetite for fully privatizing the agency, which could have undermined its current mission to serve rural America. The unions that represent postal workers have waged a months-long campaign opposing privatization, and business groups didn't support the idea either.

But the task force did conclude that the Post Office should act more like a private business in some ways, including having the "authority to charge market-based prices for both mail and package items." Currently, the agency is limited in how quickly it can raise rates, among other restrictions imposed by Congress that prevent it from adapting to a steady decline in the volume of first-class mail.

In the new business model the task force envisions, the Post Office would retain uniform prices for "essential services" like shipments of pharmaceuticals and government notices, to every address in the country. But it would charge more for "commercial services," including advertising mail and most anything you might order on Amazon.

"Many of the Task Force's proposed reforms to pricing, costing, and services are designed to create such a transfer of value from commercially oriented products to socially oriented essential services," the report reads. "Although the USPS must still serve all citizens and businesses in the country, its goal with respect to commercial mailers and shippers must be to optimize long-term revenue based on market principles, rather than to ensure access to a rate-regulated, uniform government service."

The Coalition for a 21st Century Postal Service, which represents business mailers including Amazon and eBay, cautioned against hiking prices for commercial products. Art Sackler, the association's director, said that while the Postal Service's package revenues are currently growing at a quick clip, FedEx and UPS are already stealing some of that business as online retail increases demand for deliveries in densely-populated areas.

"So the air may slowly go out of that balloon," Sackler said. "And if you raise prices significantly, you're going to do nothing but speed that up."

While recommending that the Post Office explore alternative income streams such as charging other shippers access to post office boxes and selling hunting licenses, the report took a stand against allowing the agency to offer financial services. That idea that had gained traction in the Obama administration as a strategy to put the Post Office on sound financial footing while also providing access to checking accounts and small loans in underserved areas.

"When we measured the impact of postal banking could have, the communities that would most benefit are rural areas -- Trump country, honestly," said Mehrsa Baradaran, a law professor at the University of Georgia who helped Obama's Treasury officials develop banking proposals. "What they're saying is the Post Office should not add any more revenue sources, and then they project that the Post Office won't have more revenue."

The report also focuses on cutting costs, including personnel compensation, which is still higher than the Postal Service's private sector competitors despite years of outsourcing and union concessions. One recommendation would eliminate collective bargaining over wages, which is currently the case for most federal government unions.

"This report calls for slashing universal service," said Mark Dimondstein, president of the American Postal Workers Union, which represents 200,000 of the Postal Service's 643,000 employees. "Recommendations would slow down service, reduce delivery days and privatize large portions of the public Postal Service. Most of the report's recommendations, if implemented, would hurt business and individuals alike."

Many of the actions outlined in the report, such as redefining what counts as an "essential" service subject to rate caps, could be accomplished through administrative action. But most changes having to do with the Post Office's governance structure and employee relations would have to go through Congress.

Business groups have pushed the White House to support bills long pending in Congress that would address the requirement that the Post Office pre-fund its retiree benefits -- which are the source of much of its apparent deficit -- as well as make smaller tweaks to pricing and contracts with large mailers.

Comprehensive changes seem unlikely, however, even those now backed by the White House.

"Getting reform passed has been an elusive goal," says Michael Plunkett, president of the Association for Postal Commerce, which also represents mailers. "Some of these things could be done through very targeted legislation that doesn't seek to overhaul the Postal system."

Mississippi Coronavirus Cases

Data is updated nightly.

Cases: 319704

Reported Deaths: 7369
CountyCasesDeaths
DeSoto22276267
Hinds20677421
Harrison18407317
Rankin13880282
Jackson13689248
Madison10249224
Lee10056176
Jones8464167
Forrest7827153
Lauderdale7260242
Lowndes6509150
Lamar634888
Lafayette6310121
Washington5420137
Bolivar4837133
Panola4669110
Oktibbeha466098
Pearl River4604147
Marshall4573105
Warren4440121
Pontotoc425373
Union415777
Monroe4155135
Neshoba4061179
Lincoln4008112
Hancock386687
Leflore3515125
Tate342486
Sunflower339491
Pike3369111
Alcorn325972
Scott320174
Yazoo314171
Adams307486
Itawamba305178
Copiah299966
Coahoma298784
Simpson298189
Tippah291968
Prentiss283861
Leake271974
Marion271280
Covington267283
Wayne264442
Grenada264087
George252051
Newton248663
Tishomingo231568
Winston229981
Jasper222148
Attala215073
Chickasaw210559
Holmes190374
Clay187854
Stone187833
Tallahatchie180041
Clarke178980
Calhoun174132
Yalobusha167840
Smith164034
Walthall135347
Greene131833
Lawrence131024
Montgomery128643
Noxubee128034
Perry127138
Amite126342
Carroll122330
Webster115032
Jefferson Davis108033
Tunica108027
Claiborne103130
Benton102325
Humphreys97533
Kemper96629
Franklin85023
Quitman82216
Choctaw79118
Wilkinson69532
Jefferson66228
Sharkey50917
Issaquena1696
Unassigned00

Alabama Coronavirus Cases

Cases: 548323

Reported Deaths: 11288
CountyCasesDeaths
Jefferson809531565
Mobile42066826
Madison35663525
Tuscaloosa26162458
Shelby25595254
Montgomery25081612
Baldwin21839313
Lee16265176
Calhoun14718325
Morgan14626285
Etowah14171363
Marshall12449230
Houston10764288
Elmore10295213
Limestone10182157
St. Clair10160251
Cullman9941201
Lauderdale9596249
DeKalb8967189
Talladega8458184
Walker7335280
Autauga7230113
Blount6944139
Jackson6922113
Colbert6414140
Coffee5627127
Dale4929114
Russell454941
Chilton4472116
Franklin431083
Covington4273122
Tallapoosa4136155
Escambia401780
Chambers3726124
Dallas3607156
Clarke352961
Marion3242106
Pike314078
Lawrence3129100
Winston283572
Bibb268464
Geneva257581
Marengo250665
Pickens236862
Barbour234659
Hale226878
Butler224071
Fayette218162
Henry193843
Cherokee187245
Randolph187044
Monroe179341
Washington170439
Macon162951
Clay160159
Crenshaw155657
Cleburne153244
Lamar146537
Lowndes142054
Wilcox127030
Bullock124242
Conecuh113430
Coosa111429
Perry108626
Sumter105732
Greene93534
Choctaw62025
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