The Washington PostDemocracy Dies in Darkness

Is the postal privatization proposal dead? Maybe not, but the task force makes no recommendation.

Critics say the report could lead to higher costs and less service.

(Alex Edelman/Getty Images)

The Trump administration’s task force on reforming the U.S. Postal Service is notable for what it did do, what it didn’t do and what could result from what it wants to do.

Privatization, the most dramatic change, was not recommended in a report released Tuesday by the task force, led by Treasury Secretary Steven Mnuchin. That’s despite the strong suggestion to privatize in an administration reorganization plan released in June.

Task force members, however, did continue Trump’s unrelenting drive to weaken federal unions by urging elimination of collective bargaining over compensation.

If the recommendations are implemented, the result, critics say, would be higher costs with less service for customers.

But Sen. Ron Johnson (R-Wis.), chairman of the Senate committee that oversees the Postal Service, praised the task force for tackling “the ugly reality, the financial instability, unsustainability of the postal system, and laying out things that we’re going to have to do to stabilize it. It’s a large organization, but it’s not unmanageable if you bring basic business principles and have a governing board that actually works,” he told WTMJ radio in Milwaukee on Thursday. The Postal Service needs greater freedom “so they can actually do the things that any business in that situation with dramatically declining volume, inability to price their products properly in the marketplace — we’ve got to give them the authority to do that without a taxpayer subsidy.”

That leads to a discussion of postal privatization, which the administration praised in its earlier reorganization plan. Under the heading “The Opportunity,” the plan said “a privatized Postal Service would have a substantially lower cost structure, be able to adapt to changing customer needs and make business decisions free from political interference, and have access to private capital markets to fund operational improvements without burdening taxpayers. The private operation would be incentivized to innovate and improve services to Americans in every community.”

While the task force report said that “many industrialized countries have pursued privatization of their postal systems — either completely or in part — to lower costs for consumers while improving service quality,” there was no recommendation for the United States to follow suit.

A privatization recommendation would face strong opposition from Congress and postal employees. A Senate resolution against postal privatization has 50 co-sponsors. A companion measure in the House has 239. Any plan with 300 members of Congress against it is going nowhere. That number probably will increase with Democratic control of the House next year.

Labor leaders also pressed a vigorous campaign to rally public opposition to privatization.

Two of the largest postal unions, the American Postal Workers Union (APWU) and the National Association of Letter Carriers (NALC), sponsored television and digital advertisements against the reorganization plan’s proposal. One ad showed a man frustrated by poor service in a privatized system using a sledgehammer to smash a mailbox along a rural road.

NALC President Fredric Rolando claimed “victory for the public and the NALC. Our efforts to mobilize the public and a majority of Congress to oppose privatization and to support H. Res. 933 and S. Res. 633 (the House and Senate resolutions) have paid off.”

But does that mean the privatization effort is dead?

The report highlights private systems in Germany and New Zealand, leading Rep. Gerald E. Connolly (D-Va.) to say that “the task force produced a report to support and continue the Trump Administration’s unpopular push towards privatizing the Postal Service.” Connolly is the ranking Democrat and probably the next chairman of the House Government Operations Subcommittee with Postal Service oversight.

While some of the task force recommendations regarding service are vague, they could, when taken with the administration’s previously stated positions, lead to increased costs and less service for customers.

One task force recommendation would require price increases, reduce service costs, or exit the business for any mail products that are not deemed an essential service and do not cover their direct costs.” Who would decide what is essential?

“Suggesting that a government monopoly have unchecked pricing authority … would almost certainly harm an industry that employs millions of US citizens and contributes billions to US GDP,” Michael Plunkett, Association for Postal Commerce president and CEO, said by email.

The task force also wants the Postal Service to have “greater flexibility to determine mail and package delivery frequency.” Consider “greater flexibility” a euphemism for less service. The reorganization plan provides more detail: “major changes are needed in … the level of service Americans should expect from their universal service operator. … A private postal operator that delivers mail fewer days per week and to more central locations (not door delivery) would operate at substantially lower costs.”

A favorite way to lower costs among Republicans is cutting employee compensation.

Task force members specially called for “eliminating collective bargaining over compensation for USPS employees,” noting that other federal workers do not have that right. The task force also would freeze postal workers’ wages and increase their out-of-pocket contributions toward retirement, which would effectively lower their take-home pay.

This leaves Rolando livid: “NALC totally rejects this attack on hard-working American workers and we are confident that bipartisan majorities in both houses of Congress will, too.”

Read more:

Postal unions making big ad buy to stop postal privatization before Trump releases plan

Congressional opposition to Trump's postal cuts, privatization plan grows

Postal Service finances ‘very serious but solvable’ as bipartisan action develops