MARY LOUISE KELLY, HOST:
All right, to another story now. At the fight - at the heart of the current fight over the post office is this issue. Is mail delivery a public service or is it a business? Keith Romer from our Planet Money podcast explains that is a question that goes back 50 years.
KEITH ROMER, BYLINE: In 1970, President Richard Nixon sent in the National Guard to deliver the mail because postal workers wouldn't do it.
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UNIDENTIFIED PERSON: We want to work.
ROMER: They'd gone on strike for better wages.
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UNIDENTIFIED PERSON: Either they give us what we should have, or we will stay on strike until hell freezes over.
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ROMER: The post office had been inefficient and highly politicized for a long time, and both Democrats and Republicans wanted to reform it. In 1970, after the strike, they did. Congress gave postal workers the raise they wanted but also fundamentally transformed the post office from a pure public service to something more like a business.
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DAVID TRIMBLE: Until that point, the post office was a department of the federal government.
ROMER: That's David Trimble from the Government Accountability Office. He says the old version of the post office made a lot of its money from stamps, but the rest of it had come out of the federal budget.
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TRIMBLE: They received about 25% of their operating expenses in the form of appropriation.
ROMER: But under the new law, Congress was no longer going to fund the post office. The new Postal Service got to keep its physical post offices, the mail trucks, the uniforms. But it still had the obligation to deliver mail to every address in the country. And the government was going to be the one to set prices.
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TRIMBLE: So you want them to operate a business, but you're telling them what services they have to provide, and you're telling them how much they can charge.
ROMER: For a while, this new business version of the post office actually worked. Year after year, mail volume just kept increasing and so did revenue. But then, in the early 2000s...
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ROMER: ...Email - it was cheaper, faster. You don't have to lick anything.
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ROMER: First-class mail delivery peaked in 2001 at 103 billion letters and just went downhill from there. So in 2007, Congress said the Postal Service could increase some of its prices. But at the last minute, it slipped in another requirement - said the Postal Service would have to prepay its workers' retirement health benefits.
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RUTH GOLDWAY: So when the final bill came out, there were many of us who were very surprised and said, what is this payment we have to make?
ROMER: That's Ruth Goldway, who, at the time, was a commissioner at the Postal Regulatory Commission.
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GOLDWAY: No other government agency and almost no other business puts money away for future health care retiree benefits claims.
ROMER: But now the Postal Service did. It had 10 years to put together this giant pool of money to cover millions of current and former workers - $5 billion a year, which, for an organization that was already struggling to turn a profit, was devastating. In 2011, it just stopped paying - couldn't afford to anymore. Today the post office owes a lot of money not just to prefund its retirement health care benefits; it also owes tens of billions of dollars for pensions and worker's compensation.
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TRIMBLE: In 2019, that liability totaled $161 billion.
ROMER: That's David Trimble again from the Government Accountability Office. One-hundred-sixty-one billion dollars is more than twice the money the post office brought in last year.
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TRIMBLE: The current business model is no longer feasible. It's financially not sustainable. And its mission is at risk unless there are significant reforms made.
ROMER: Right now the Postal Service is kind of a business except it has so little control over how it makes money or cuts costs. And it's kind of part of the federal government. But except for overseas voting and mail services for the blind, Congress doesn't pay for anything. The Postal Service did get a $10 billion loan in the CARES Act, but it has to pay it back. Trimble says in order to fix the fundamental contradictions at the post office, it's up to Congress to decide. Is the post office a business? Or is it a public service?
Keith Romer, NPR News. Transcript provided by NPR, Copyright NPR.
