News & Politics

Privatize the Postal Service? The Coronavirus Pandemic Could Make It Happen

United States Post Office (Stock image via Pixabay)

Post offices suck. We all know it. They’re run horribly, they don’t make money, their package tracking can’t hold a candle to private delivery alternatives like UPS, FedEx, etc. The best idea to come out of the United States Postal Service in years has been the Forever stamp, and even that hasn’t exactly helped them solve their problems. But, Article I, §8, Clause 7 of the Constitution gives Congress the power “to establish post offices and post roads,” and so we’re kinda stuck with this poorly managed monopoly.

Or are we?

The coronavirus has hit the postal service hard, and currently, they’ve been given no bailout from Congress in the recent stimulus packages. They are allowed a $10 billion loan from the Treasury Department, but that loan has yet to be delivered because it hasn’t been approved yet. No reason has been given for the delay, but according to American Postal Workers Union President Mark Dimondstein, the Trump administration is delaying the loan in order to push for privatization. He told Yahoo News that administration “idealogues,” including Treasury Secretary Mnuchin, are using the crisis “to push their privatization agenda.”

The United States Postal Service has been self-funded from its own revenues since the 1980s, and the coronavirus pandemic has negatively impacted their business significantly. “The Postal Service saw a 24.2 percent decline in delivered mail volume during the week of March 29 to April 4 and delivered-mail volume was down over 30 percent for the first three days of last week, according to a presentation made by the Postal Service and distributed to members of Congress last week,” Yahoo News reports.

The presentation, which was obtained by Yahoo News, predicted that there would be 35 billion fewer pieces of mail in the remainder of the fiscal year, which ends in September. The Postal Service is forecasting the declines to continue through the next fiscal year leading to a $23 billion increase in net losses over the next 18 months.

They note that “one major concern” about privatizing the postal service is that they have a universal service obligation requiring them to deliver mail for equal rates anywhere in the country, including rural routes that aren’t profitable. Private companies don’t have that obligation and can pick and choose where they provide service.

It’s certanily important for these areas to have access to the postal service and deliveries, but that doesn’t mean we can’t, at the very least, partially privative the U.S. Postal Service. Currently, they are asking for $50 billion in grants to cover their losses during the pandemic and to modernize their operations. Do we really want to bail out the postal service when there are private alternatives that could do better? Is that any different than bailing out book stores because their business has lost out to online alternatives? Not really. The USPS hasn’t adapted to the times, and taxpayers shouldn’t have to foot the bill for that.

The Cato Institute believes privatization of the USPS can work without sacrificing their mandate for universal delivery. Let’s give it a shot.


Matt Margolis is the author of Trumping Obama: How President Trump Saved Us From Barack Obama’s Legacy and the bestselling book The Worst President in History: The Legacy of Barack Obama. You can follow Matt on Twitter @MattMargolis