Introduction

Doctors have recently diagnosed Rose with a rare disease, and since she lives in a rural town, she doesn’t have easy access to the medicine she needs. Fortunately, her parents can request that the doctors send the medication by mail. Every month, the postal service delivers it.

Explanation

With over 300 million people in America, sending and receiving letters and packages, how does it all get delivered? Each day, the United States Postal Service processes and delivers 472.1 million pieces of mail. The Postal Service also offers universal rates for all Americans regardless of geography, ensuring that even those in isolated areas remain connected.

United States Postal Service

The United States Postal Service, or the USPS, is an independent agency of the federal executive branch. The President appoints the Board of Governors with the Senate’s consent, and they then appoint the postmaster general, the chief executive officer of the USPS. Established in 1792, the USPS is in charge of providing mail services to the entire country, including U.S. territories and associated states.

The History

From 1753 to 1774, Benjamin Franklin oversaw Britain’s mail service in the colonies and cut down on the delivery time of letters, which connected a scattered and disparate nation during the Revolutionary War and after. In 1775, at the Second Continental Congress, Benjamin Franklin was appointed the first postmaster general, and in 1792, the Postal Service Act created the Post Office Department. It became an independent agency in 1970. Unlike many government agencies, the USPS is explicitly authorized in the Constitution, which states that Congress has the power “To establish Post Offices and Post Roads.”

By 1831, the United States had double the number of post offices that Britain did, and five times as many as France. This system was significant to many people because it allowed them to get the newspaper delivered cheaply. Letters, mainly sent by the well-off, subsidized newspapers’ costs so even those in rural areas could remain informed of what was going on in other parts of the country. By the 1900s, the USPS had started delivering packages. This idea worked out so well that some started mailing people as packages since postage was cheaper than a train ticket. Later regulations forbade sending people by mail.

The USPS has evolved over its history, from focusing mainly on newspapers to letters to packages, as well as shifting from delivering to post offices to doing home deliveries. Since the rise of email communication, though, letters have fallen in terms of amounts delivered. However, the number of packages delivered is still increasing. 

Lately, the USPS’s revenue has begun to slow. In 2006, Congress passed the Postal Act, which strictly defines “postal service” as letters and packages. This law means that the USPS cannot innovate as it previously did to focus on more profitable ventures. The law also created a 50-year payment schedule for retiree health benefits, which includes ten years of statutorily prescribed prefunding payments. In other words, the USPS must prepay most of 50 years’ worth of retiree health benefits, totaling $110 billion, in ten years. Some argue that lawmakers were deliberately trying to make the USPS less profitable, as all other federal agencies use pay-as-you-go approaches. In part due to the recession in 2007 and 2008, the USPS began defaulting on its payments in 2012. Nevertheless, other financial problems plague the USPS, even outside of this law.

How It Works

The USPS is required to provide service to all Americans, at a uniform price and quality, regardless of their geographic location. Some argue that the USPS’s monopoly on letter delivery is unfair and that privatizing the service would result in lower rates. They also contend that people in isolated areas should pay more, having assumed the cost of living in that area, so people in more central locations don’t have to pay the slightly higher rates that subsidize their costs. However, supporters of the agency argue that the USPS is a public service that provides accessible rates to millions of people and that privatizing it would result in price hikes for those who can least afford it. 

The USPS is a government agency designed to be self-sustaining, but, in part due to the 2006 law, it suffered a net loss of $8.81 billion in 2019. However, the agency also brought in a revenue of $71.1 billion that year while providing an essential government service. For comparison, the 2020 budget for the Department of Defense was $721.5 billion. 

Applying It

The USPS ensures that everyone can remain connected, even if they live in isolated areas. It keeps prices uniform despite location. It delivers critical pieces of mail from the government, even mail-in ballots during the elections, as well as life-saving medicine. Whatever your opinion on its recent financial woes, the USPS has a long history of ensuring essentials end up in the right places.

    Learn More

    1. Blom, Kirstin B., and Katelin P. Isaacs. “U.S. Postal Service Retiree Health Benefits and Pension Funding Issues.” Congressional Research Service, 7 Jan. 2015, https://fas.org/sgp/crs/misc/R43349.pdf.
    2. Gallagher, Winifred. “A Brief History of the United States Postal Service.” Smithsonian Magazine, 21 Aug. 2020, https://www.smithsonianmag.com/smithsonian-institution/brief-history-united-states-postal-service-180975627/. 
    3. Parks, Miles. “Why Is Voting By Mail (Suddenly) Controversial? Here’s What You Need To Know.” NPR.Org, 4 June 2020, https://www.npr.org/2020/06/04/864899178/why-is-voting-by-mail-suddenly-controversial-heres-what-you-need-to-know. 
    4. “Postal History.” United States Postal Service, https://about.usps.com/who-we-are/postal-history/.
    5. Upholt, Boyce. “The Tumultuous History of the U.S. Postal Service—and Its Constant Fight for Survival.” National Geographic, 18 May 2020, https://www.nationalgeographic.com/history/2020/05/tumultuous-history-united-states-postal-service-constant-fight-survival/.

    Think Further

    1. Do you think the 2006 law requiring the USPS to prepay retiree health benefits should be repealed? Why or why not?
    2. What is one change the USPS or lawmakers could take to make the agency more effective?
    3. What is one action you can take to advocate for beneficial changes to the USPS?

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