FreedomWorks misfires on postal reform

Recently, Cesar Ybarra of FreedomWorks published an op-ed attacking the bipartisan Postal Reform Act of 2021 introduced by Rep. Carolyn Maloney (D-N.Y.) and Rep. James Comer (R-Ky.), chairman and ranking member, respectively, of the House Committee on Oversight and Reform. The op-ed contains unfounded assertions and misleading statements about both the legislation and the U.S. Postal Service.

The bill, H.R. 3076, has broad support in the House (61 co-sponsors, including 24 Republicans). An identical Senate companion bill (S. 1720) introduced by Sens. Gary Peters (D-Mich.) and Rob Portman (R-Ohio) also has bipartisan support, with more Republican co-sponsors — 13 — than Democrat.

Contrary to Ybarra’s assertion that H.R. 3076 disregards standard accounting and cost-management practices, the legislation would strengthen the Postal Service’s finances by adopting private-sector best practices in two important ways.

First, it would repeal a grossly unfair mandate on the USPS to prefund future retiree health insurance premiums years in advance, something no other enterprise in the country faces — a mandate that has cost an average of $5.2 billion annually and that has accounted for 84 percent of USPS losses since it went into effect in 2007. Repeal would return USPS to the pay-as-you go method for covering such premiums used in the private sector. 

Second, although nearly 80 percent of current postal retirees already enroll in Medicare, the bill would adopt the private-sector practice of near-total Medicare enrollment among retirees covered by company health insurance plans to reduce the cost to such plans — taking full advantage of Medicare taxes paid by postal employees and the USPS — by reforming how the Federal Employees Health Benefit Program covers postal employees and annuitants.

Ybarra calls the Medicare provisions a “taxpayer bailout,” claiming that the legislation relieves the USPS of $46 billion in “debts.” It does no such thing. Reducing the Postal Service’s future liabilities through the adoption of private-sector practice is not debt relief. The Postal Service and its employees have contributed tens of billions of dollars in taxes to the Medicare program and have every right to use its benefits, which will raise Medicare spending by less than two-tenths of one percent. At the same time, USPS will pay the full cost of retiree health premiums as they are incurred.

The real target of Ybarra’s article was a provision calling for the maintenance of “integrated delivery” of mail and packages six days a week. Six-day delivery has been mandated by an annual appropriations rider since 1983, and permanently mandating it in the law has strong bipartisan support in Congress and broad support among all the Postal Service’s leaders and stakeholders (including Postmaster General Louis DeJoy), the largest mailing industry trade association, and all the agency’s employee groups.

The FreedomWorks article calls the integrated delivery language “ambiguous and confusing,” even though the provision in Section 202 of the bill is crystal clear: “The Postal Service shall maintain an integrated network for the delivery of market-dominant and competitive products (as defined in chapter 36 of this title).” In layman’s terms, the USPS is to do what it has always done: deliver letters and packages together using the same infrastructure for delivery. These shared networks offer economies of scope that help keep our postage rates the lowest and most affordable in the developed world. Enacting postal reform will keep them that way by lessening the need to increase rates on packages and letters alike.

With the focus on integrated delivery, Ybarra and FreedomWorks appear to be allying themselves with the only significant opponent of Section 202: the private shipper United Parcel Service (UPS). UPS has tried and failed repeatedly to convince the Postal Regulatory Commission (PRC) and the federal courts that delivery of mail and packages together via a shared network is somehow unfair to private companies. It has repeatedly claimed that the Postal Service subsidizes its package delivery business with profits from letter mail delivery. These claims have no merit, according to the PRC and every federal court that has reviewed them. Indeed, in its most recent Annual Compliance Report, the PRC (the USPS’s regulator) found that competitive products (packages) generated $11.2 billion more in revenues than they cost to deliver.

Yet Ybarra’s piece repeats or insinuates all the usual false claims that “integrated delivery” unfairly saddles letter mail customers with costs; that USPS artificially suppresses its package delivery prices; and that USPS subsidizes companies like Amazon by keeping its delivery prices low.

None of this is true.

The Postal Service is a crucial part of our nation’s economic infrastructure, and it has proven its value over the past 18 months. It helped tens of millions of Americans survive the pandemic with low-cost e-commerce delivery, and it has broad bipartisan support — with a 91 percent favorability rating among both Democratic and Republican voters, according to Pew Research. By strengthening USPS finances, the Postal Reform Act of 2021 serves the common good and the public interest.

Fredric Rolando is president of the National Association of Letter Carriers.