Bipartisan Senate Group Opposes Trump USPS Privatization Plan

A bipartisan group of U.S. senators stands in opposition to the Trump administration’s call to privatize the U.S. Postal Service in an effort to drive efficiency and take out costs, according to a report in GovExec.

The Senate resolution, introduced by Sen. Claire McCaskill, D-Mo., has five Republican cosponsors and is backed by 27 senators in all. This follows a House resolution introduced this summer that has 190 signatures from members of both parties, including more than three dozen Republicans.

“The incentives simply aren’t there for private companies to take mail that last mile for people living in rural communities, and I’m going to fight tooth and nail to ensure that every Missourian—whether in a small town or big city—has access to the critical services the Postal Service provides,” McCaskill told GovExec.

Earlier this year McCaskill cosponsored a bipartisan bill to reform the USPS by removing liabilities, such as prefunded retiree healthcare, and allowing it to pursue new lines of business while having it remain a government entity.

“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 White House said in a broader federal reorganization plan introduced in June. “The private operation would be incentivized to innovate and improve services to Americans in every community.”

Trump’s task force headed by the Treasury Department that is looking into USPS reforms delivered its report to the president by the Aug. 10 deadline. However, the results have not been made public; its release is expected to be held over until after the November elections.

Critics including Trump say the USPS is under-charging major ecommerce shippers, especially Amazon, and losing money on parcel delivery. A 2017 analysis by Citigroup claimed the USPS loses $1.46 on every Amazon package it delivers; the USPS disputes that figure.

Defenders of the USPS say it effectively delivers mail and parcels to every ZIP code – increasingly including Sundays for Amazon and others – and does so at a lower cost for shippers. It also provides last-mile service for both FedEx and UPS. The USPS has been encumbered by the retiree benefit albatross, a legacy of the 2006 Postal Reform Act, draining millions annually. Each quarter, the USPS reports a decline in mail volume but a double-digit rise in parcel delivery as ecommerce booms.

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