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Sunday, February 17, 2019

Executive Order 13829: US Postal System

What the Executive Order says

Executive Order (EO) 13829 is entitled "Taskforce on the United States Postal system" and has 7 sections.  It was issued in April 2018.

Section 1

This section sketches out that the US Postal System (USPS) is currently operating under a financing model that is structurally unsustainable and cites certain facts in support of that position.

Section 2

This section defines who will be on the Task Force and that it will be led by the Secretary of the Treasury.

Section 3

This section directs the Task Force to seriously reconsider the traditionally understood mandate of the USPS and how present trends extrapolate into the future such as additional package volume due to e-commerce and similarly, the reduced letter volume due to electronic communications technologies.

Section 4

This section discusses what is to be considered when the Task Force comes up with recommendations.  The recommendations should not increase taxes and needs to consider EO 13781 (which I discuss here) as well as the views of the USPS workforce and customers.

Section 5

This section mandates that a report be generated within 120 days to summarize the findings and recommendations of the Task Force.

Section 6

This section indicates from where the funds to run the task for will come, which is the Federal Financing Bank.

Section 7

This section, labeled "general provisions" includes specific text to ensure that the EO does not exceed the constitutional limits on executive power.

My commentary

So the lapse of time actually very much worked in the favor of being able to capture a more comprehensive consideration of what is going on with this EO.  And there are considerable tides pushing this issue around.  First is that everyone agrees that USPS needs to exist and it needs to provide mail services to everyone.  However, in providing that service, many argue exactly who should be footing the bill or why a post office should exist in every hamlet with a 1,000 people who live thereabouts.  In that respect, this EO certainly is continuing that argument, especially when it asks that "universal service" needs to be redefined.
Second, I do think that it is fair to re-consider the mission of USPS because of the large scale technological changes that have happened over the past 20 years.  But to draw the conclusion that because of these changes, USPS is a relic that is long past its expiration date is wrong.  There is a role to play and USPS could enhance the services that it provides to mail customers through technology and there needs to be an incubator so that new services could be developed.  These services may well compete in the market against services being provided by publicly traded or privately held for-profit corporations.  For some this should not be allowed by their fundamental philosophy.  But my opinion is that if you are wanting to not fund the USPS through tax based subsidies to be able to succeed in the mission to provide universal service, then you have to let it compete in the market.
Given the predispositions of the current administration, it is entirely probable that the report will favor eliminating as much of USPS as possible.  The final report, issued in December 2018 is here.  It is 74 pages long.  There was also an interim report in August of 2018.
The recommendations in the report notably include a lot "keep things the same, but make money instead of losing it".  It is not a great report, but on the other hand, it doesn't significantly push for privatization either.









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