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Recommendations for U.S. Postal Service reform were handed to the Trump administration by the latest federal task force studying the issue. Proposed changes would hit rural Iowa the hardest.
Key proposals relate to the core mission of the Postal Service to deliver mail to every address in the country. They '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.”
But the task force offered only a vague definition of what would qualify as an 'essential service.” Officials told reporters that person-to-person mail and packages would be considered essential services and exempt from higher rates, but final rules are yet to be developed.
The task force also wants the Postal Service to have 'greater flexibility to determine mail and package delivery frequency.” Based on an earlier plan floated by the Trump administration, this is a 'needed” and 'major change” in 'the level of service Americans should expect from their universal operator.” The administration believes '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.”
Postal Service employees, according to the task force, should not be allowed to collectively bargain for salaries and benefits. The task force also recommends freezing postal workers' wages and increasing out-of-pocket retirement contributions, all of which would lower take-home pay and negatively impact local economies.
The 74-page report was compiled by a Treasury Department task force, ordered by President Donald Trump last spring after he had taken to Twitter to disparage a 'last mile” contract between USPS and online retailer Amazon. Trump accused the Postal Service of subsidizing Amazon and losing money on its package delivery services.
'Only fools, or worse, are saying that our money losing Post Office makes money with Amazon,” Trump tweeted in April. Task force members, however, didn't find that the USPS loses money on Amazon, and they stopped short of calling for full privatization of the organization, which was an idea floated by the Trump administration in its reorganization plan.
What they have proposed, however, could further isolate rural residents, add expense for rural businesses that ship goods, downgrade some currently dependable rural jobs and make rural newspaper distribution more difficult and costly.
Largely ignored were long-standing reform proposals that would protect rural access and actually add to the Postal Service's bottom line, such as removing the requirement that the USPS pre-fund health benefits for its retirees for 75 years. Mandated by Congress in 2006, it is a requirement no other government agency must meet. The task force also sidestepped what lawmakers consider a key reform: Requiring most eligible employees and retirees to use Medicare as their primary health care provider.
Under current rules, the USPS steadily is losing money. For fiscal 2018, the net loss was $3.9 billion, which was up from $2.7 billion in fiscal 2017 but lower than its $5.6 billion loss in 2016. It was the 12th consecutive year of losses.
The existing model clearly cannot survive without significant taxpayer investment - despite across-the-board rate hikes that go into effect in January.
Reforms are needed and should be welcomed, so long as changes don't unduly punish some Americans more than others.
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