In 1971, Nixon Passed a Rule to Doom the Post Office. Now, It’s Finally Happening.

The Post Office used to be federally funded. Then, Republicans passed legislation requiring it to “pay for itself.”

Rebecca Burns July 14, 2020

A postal worker delivers mail on Chicago’s South Side in 1973. The Postal Service may stop delivering by the end of September, thanks in part to its 1970s-era reorganization, which Lawrence Swaim examined in the August 10,1977, issue of In These Times. (Smith Collection/Getty Images)

The Unit­ed States Postal Ser­vice (USPS) was in trou­ble before the Covid-19 out­break, but now it’s fight­ing for its life — offi­cials pre­dict a $13 bil­lion rev­enue loss amid declin­ing mail vol­ume this year alone and warn the agency will run out of cash by Sep­tem­ber unless Con­gress steps in. 

By the end of 2019, the USPS carried $160.9 billion in debt—with nearly $120 billion of it from that requirement.

Pres­i­dent Don­ald Trump has called the USPS a joke” and refused addi­tion­al fund­ing unless the price to send pack­ages increas­es by four or five times.” Repub­li­cans now see an oppor­tu­ni­ty to deal a death blow to a pub­lic ser­vice they have tried to bleed dry for decades. 

Pre­vi­ous­ly a fed­er­al­ly fund­ed cab­i­net-lev­el depart­ment, Pres­i­dent Richard Nixon over­hauled the Post Office in 1971, which cre­at­ed what we know today as the USPS. The move fol­lowed a wave of mil­i­tan­cy by more than 200,000 clerks and car­ri­ers in 30 major cities who walked off the job for high­er pay and col­lec­tive bar­gain­ing rights. While postal unions did win bet­ter pay and bar­gain­ing rights, the reor­ga­ni­za­tion was a dou­ble-edged sword. The 1971 fed­er­al leg­is­la­tion estab­lished the USPS as a new inde­pen­dent agency and required it to pay for itself” — mean­ing the agency would receive no tax dol­lars and instead fund itself direct­ly through the sale of its postage, prod­ucts and ser­vices. As explained by Lawrence Swaim, for­mer leader in the Postal Clerks Union, in a four-part series for In These Times in 1977:

The effort to make the post office run like a reg­u­lar busi­ness” had advan­tages for con­ser­v­a­tive inter­ests as well. They could announce to the world that they would cre­ate a postal sys­tem in which rev­enues could match expen­di­tures — in which the Post Office could pay for itself,” and if this turned out to be impos­si­ble or neces­si­tat­ed unrea­son­able rate increas­es they could blame it on labor costs, focus­ing pub­lic resent­ment on the unions.

Ever since, con­ser­v­a­tives have pushed the idea that the USPS is just a mis­man­aged busi­ness — and because of that, should be ful­ly pri­va­tized. Impor­tant­ly, Swaim warns that, in its cur­rent form:

The USPS is, in many ways, an entire­ly new phe­nom­e­non in this coun­try, one for which we real­ly have no name. Nei­ther com­plete­ly in the pri­vate nor the pub­lic sec­tor, it tends to com­bine the most repres­sive and least demo­c­ra­t­ic fea­tures of both. Its major ten­den­cy is to insu­late from unions and par­tic­u­lar­ly the pay­ing pub­lic all con­trol of its oper­a­tions. Per­haps in more ways than we wish to admit, it is the Amer­i­can insti­tu­tion of the future.

Then, in 2006, a Repub­li­can-con­trolled Con­gress passed a law requir­ing the USPS to fund its future health ben­e­fits for retirees at an annu­al rate of at least $5.5 bil­lion. By the end of 2019, the USPS car­ried $160.9 bil­lion in debt — with near­ly $120 bil­lion of it from that require­ment. So now, on paper, the USPS appears to be broke.

Still, the USPS remains one of the country’s most pop­u­lar fed­er­al agen­cies and will have an espe­cial­ly cru­cial role in an elec­tion sea­son like­ly to depend on mail-in bal­lots. It also pro­vides more than 600,000 sta­ble, good-pay­ing jobs (21% of which are tak­en by African Amer­i­can work­ers). Con­gress must hold the line to pro­tect the USPS. 

Rebec­ca Burns is an award-win­ning inves­tiga­tive reporter whose work has appeared in The Baf­fler, the Chica­go Read­er, The Inter­cept and oth­er out­lets. She is a con­tribut­ing edi­tor at In These Times. Fol­low her on Twit­ter @rejburns.
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