HSGAC members Sens. Heidi Heitkamp (D-N.D.) and Claire McCaskill (D-Mo.) introduced the latest legislative attempt at postal reform, and have released statements pushing back against plans to privatize the Postal Service.
Cosponsors Sens. Jerry Moran (R-Kan.) and Tom Carper (D-Del.) have also released statements opposing privatizing the Postal Service.
Members of the House Oversight and Government Reform Committee have also pushed back on the Trump administration’s proposal.
House and Senate lawmakers introduced several postal reform bills in recent years, but none have reached a floor vote in either chamber. All of them focus mainly on USPS’ requirement to pre-fund health benefits for future postal retirees.
The 2006 Postal Accountability and Enhancement Act (PAEA) put that mandate into effect, and since 2006, the agency has defaulted on tens of billions of dollars in scheduled payments to the fund.
John McHugh, a former Army secretary under the Obama administration, and a former New York congressman, helped write the PAEA. He’s now the chairman of the Package Coalition, a group of retailers and e-commerce companies.
“The pre-funding requirement that was in the ’06 bill that I helped work on was not something I favored, but in the world of Congress, to get a bill passed, sometimes you have to take the good with the less good. That pre-funding requirement, I think, has placed a real burden on the Postal Service,” McHugh said in an interview.
“It probably, at least in my judgment, would merit revisiting,” he added.
The Postal Service, which receives no funding from Congress, is the only federal agency faced with a pre-funding requirement.
McHugh said he’s not surprised by the Trump administration’s plans to privatize the Postal Service, but added that he thinks it isn’t the right path forward.
“It’s not a novel idea. We talked about it during the 12 years that I was involved in developing postal reform legislation,” he said. “Whatever one may think of the proposal itself, I think it does comport at least generally with the administration’s view toward the division between government and privately provided service.”
In charting a path forward, McHugh said the Postal Service should look at safeguarding its package business, which brought in more than $7 billion in profit last year.
Every year since 2012, package delivery volume has grown by double digits. But the Postal Service reported a slowdown in its package growth in the third quarter of fiscal 2018.
Combined with a decline in first-class mail, the Postal Service’s most profitable product, McHugh said the Trump administration should avoid raising the rates of shipping packages.
“Unlike the general financial posture of the Postal Service overall, packages are one of the few, if not the only, bright spots,” McHugh said. “If you want to affect true postal reform, and if the objective is, at least in large measure, is intended to help the financial posture, the last thing you ought to consider — we would argue the thing you should never consider — is artificially raising pricing in packages, where they’re actually doing very, very well.”