The US Postal Service could look a lot more like a private corporation in a few years.
The current postmaster general, Megan Brennan, plans to step down from her position in early 2020 after a career in the Postal Service and five years as the first woman to head it. The agency’s board of governors, which is now stocked with a quorum of Senate-approved Trump nominees, will name her successor.
Like other close watchers of the agency, Ronnie Stutts, president of the National Association of Rural Letter Carriers, suspects the board will look outside the Postal Service for its next leader, perhaps to someone in the business world. Stutts’ biggest fear is that it will choose someone eager to spin pieces of the service off to the private sector.
After all, as Fortune recently reported, that’s what the White House has recommended ― to turn the independent federal agency into an investor-owned utility.
“There’s a real risk that the successor could try to hand over parts to privatise. That’s what we don’t want to happen,” Stutts, a former letter carrier whose union represents 130,000 postal employees in rural and suburban areas, told HuffPost. “We welcome innovation; we just don’t want privatization.”
Since he first started filling out his Cabinet, Trump has shown a fondness for appointing leaders hostile to the government agencies they’re tapped to lead. The postmaster general is not a direct appointment ― Trump’s picks will be making the decision. But the president has demonstrated a willingness to insert himself into the agency’s dealings in the past. He once personally pressured Brennan to hike delivery rates on Amazon as part of his feud with the company’s CEO, Jeff Bezos.
The GOP-dominated board of governors has delegated the search for postmaster general candidates to Russell, Reynolds and Associates, a firm that specializes in finding executive leaders. It’s expected that the board will choose from a roster of names supplied by the firm, looking for someone to get the Postal Service on strong financial footing.
The agency has been losing money for years; it has been hit by a steep drop in first-class mail due to advancements like online bill pay, though it has made up a lot of ground with the boom in parcel delivery fed by online retail. The agency has a lot of scary-looking red ink, but much of that is due to a unique obligation imposed by Congress that the service pre-fund retiree health benefits years in advance. Neither private companies nor other public agencies are hemmed in by such an obligation.
“No matter when they change the postmaster general, it’s a pivotal point for the Postal Service,” said Art Sackler, manager of the Coalition for a 21st Century Postal Service, a group representing businesses that rely on the agency. “But I would say that this one is far more intense than most of those pivotal points because of the financial crunch the Postal Service is experiencing.”
“The Postal Service is not supposed to make any money. We get no tax dollars. A lot of people in America don’t understand that.”
- Ronnie Stutts, president of the National Association of Rural Letter Carriers
The Postal Service may operate a lot like a business that competes with private shippers like UPS and FedEx, but it is a public entity with unique responsibilities. It routinely polls as Americans’ favorite federal agency, with 3 in 4 people saying it does an “excellent” or “good” job.
At its heart is the universal service obligation ― the not-clearly-defined idea that basically says everyone should be able to send and receive mail at an affordable price. The private mailers don’t have such an obligation; in fact, they often end up relying on the Postal Service to perform last-mile delivery for them, particularly in rural areas, where it wouldn’t make sense for UPS and FedEx to hit every address. Contrary to what many people assume, the Postal Service does not receive taxpayer money. The mail runs on postage.
The Postal Service’s financial outlook has prompted calls for major reform. The White House’s own proposal spooked a lot of groups that prize the agency’s public mission. In a 2018 reform plan for the federal government, Trump’s Office of Management and Budget suggested privatizing the Postal Service wholesale, cutting back on delivery and gutting the universal service mandate.
Trump also created a task force headed by Treasury Secretary Steven Mnuchin to propose postal reforms. Though its findings were not as drastic as the OMB’s ― the plan did not explicitly call for full-on privatization ― critics saw a back-door attack on universal service in the report through the recommendation that mail be divided into “essential” and “non-essential” categories. The task force also proposed giving the agency more leeway to cut services on its own, including dropping delivery days.
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Most controversially, the OMB blueprint would gut collective bargaining rights, changing the law so that postal unions could no longer bargain over compensation, which is already the case for federal workers in other agencies who are paid with tax dollars. Through solid wages and pensions, postal jobs have traditionally been a pathway to the middle class for millions of American workers, including a disproportionate number of African Americans and veterans.
Stutts, who started his career carrying mail in rural Tennessee, said he’s worried the next postmaster general might not value the public mission and the workforce. Brennan, he noted, started out as a letter carrier in Pennsylvania.
“The Postal Service is not supposed to make any money. We get no tax dollars. A lot of people in America don’t understand that,” Stutts said. “One of the biggest concerns we have [is] that somebody will come in with the mentality that we’ll operate totally like a business and not look at what our goal and our mission is.”
Congress would need to sign off on the most drastic reforms, but a postmaster general working in tandem with the board of governors can still do a lot.
Mark Dimondstein, president of the American Postal Workers Union, which represents 220,000 workers and retirees, said he’s worried about even partial steps toward privatization or service cuts. He subscribes to the “death spiral” theory: By trimming service to save money, the agency will just push more customers away, worsening its financial situation.
Brennan’s predecessor, Patrick Donahoe, advocated eliminating Saturday delivery and dropping to five days a week ― a proposal that drew bipartisan blowback on Capitol Hill. (Donahoe and lawmakers squabbled over whether he could implement such a change without Congress’ approval.) He also launched a failed program letting Staples employees handle postal services in stores, a move Dimondstein’s union defeated at the National Labor Relations Board.
“The postmaster general and the board of governors can slow down the mail rather than speed it up, and they can advocate for less delivery days,” Dimondstein said. “There’s an awful lot of partial privatization that they can do, and also just undermining service so that people lose confidence in the public option. The postmaster general has an awful lot of say.”
“There’s an awful lot of partial privatization that they can do ... The postmaster general has an awful lot of say.”
- Mark Dimondstein, president of the American Postal Workers Union
Brennan initially said she would retire by the end of January but now plans to stick around until the board of governors has a successor lined up, likely sometime early this year. The fact that it’s been a slow, seemingly deliberate process has given stakeholders hope that the final choice won’t be a Trumpian, slash-and-burn chief along the lines of former EPA administrator Scott Pruitt.
Tonda Rush, the public policy director at the National Newspaper Association, said the next leader of the agency has to understand the Postal Service isn’t a private company and that dramatic cuts could be destructive. Too many people rely on it, including her trade group’s members ― small community papers across the country.
“It’s got to be someone who can fully understand the operation, or quickly absorb it,” Rush said. “We’ve been down the path [before] of bringing in someone just restructuring-minded. It’s that trick of trying to redesign the plane as you’re flying it. There’s a trillion-dollar economy riding on getting the mail delivered on time.”