Are Postal Service Cuts Motivated By Voter Suppression, Privatization Or Both?

August 26th, 2020

Awake Goy

Above photo: Members of the Campaign for Postal Banking delivered more than 150,000 signatures on a petition to the U.S. Postal Service headquarters in December 2015.

Throughout its 245-year history, the Postal Service has persevered through rain, snow, heat, the gloom of night, and even a global pandemic to serve the American people. But now this vital public service is under attack from within. In the course of two short months, a new Postmaster General has dramatically slowed the mail by banning overtime pay, dismantling mail sorting machines, removing mailboxes, and other service cuts.

On August 24, the House Oversight Committee will grill Postmaster General Louis DeJoy, a Trump ally, and Republican mega-donor, about whether these reckless actions are aimed at suppressing mail-in votes in the November election. This is a legitimate fear, given President Trump’s war on the vote by mail.

DeJoy’s actions could also be aimed at advancing another Trump administration goal: privatization. In 2018, the Office of Management and Budget recommended selling off the public Postal Service to for-profit corporations. A 2019 Trump Task Force on the Postal Service, headed by Treasury Secretary Mnuchin, called for the privatization of wide swaths of the public agency.

Given the overwhelming public support for the Postal Service, the U.S. government is unlikely to be able to get away with selling it off through public stock offerings as some other nations have done. Private corporations are unlikely to be interested in buying USPS lock, stock, and barrel anyway.

The private carriers UPS and FedEx would be most interested in acquiring more of the public agency’s lucrative and growing package business. They don’t need legislative or executive action. They just need USPS to drive away their own customers by slowing deliveries and jacking up rates.

Having succeeded in slowing deliveries, USPS officials recently imposed an increase in commercial package shipping costs from October 18 through December 27. While private carriers have instituted holiday surcharges for certain shipment classes for two weeks around Christmas, the USPS price increase would affect virtually all USPS package shipments and for two months.

In a press statement, USPS claims that by jacking up rates only on commercial customers, it is “protecting the retail consumer during a vulnerable economic period.” But anyone who’s studied Business 101 knows that these costs will likely be passed on to customers.

The hike in package delivery costs are an early Christmas gift to UPS and FedEx. Since the August 6 USPS decision to increase their rates, Fedex shares are up 20 percent and UPS is up more than 10 percent, compared to a less than 1 percent increase in the S&P 500.

Likewise, DeJoy’s removal of high-volume mail sorting equipment in USPS facilities around the country could pave the way for privatizing this part of USPS. According to news reports, this equipment is not simply being pulled out and stored in warehouses — it’s being dismantled.

So what will happen when the pandemic ends, mail volumes rebound, and USPS needs additional sorting capacity? DeJoy could claim the “most efficient” solution is to turn to private sorting companies like Pitney Bowes to do the work, thus eliminating thousands of good public sector post office jobs.

DeJoy’s personal financial holdings should also be scrutinized by House Oversight Committee members. He owns at least a $30 million stake in USPS contractor XPO and as much as $100,000 in Amazon stock options.

House Speaker Nancy Pelosi has called back House members from their recess to vote on legislation as early as August 22 to reverse DeJoy’s service cuts and other actions that have caused mail slowdowns across the country.

This is a very encouraging step, but Congress must also come through with legislation that provides at least $25 billion in crisis relief aid to ensure that our public Postal Service can continue providing essential services during the pandemic, including handling mail-in ballots. The House approved this aid in the HEROES Act. Seven Republican Senators have joined Democrats in co-sponsoring similar legislation on the Senate side.

The fox has entered the henhouse. It’s time our leaders in Washington drive him back out and ensure our public Postal Service can continue serving all Americans for the duration of the pandemic and for years to come.

Sarah Anderson directs the Global Economy Project of the Institute for Policy Studies, and is a co-editor of Inequality.org. Scott Klinger is Senior Equitable Development Specialist at Jobs with Justice and an Associate Fellow at the Institute for Policy Studies. Read more of their research and analysis of the Postal Service.