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Privatizing U.S. Postal Service ‘unlikely’ despite Trump’s repeated attacks, says WVU law expert

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WVU College of Law Professor Matthew Titolo says privatizing the U.S. Postal Service would be a tough sell for the Trump administration due to longstanding congressional and public support of the mail delivery service. (WVU Photo)

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The deck was stacked against the U.S. Postal Service a decade before President Trump took office, according to Matthew Titolo, professor at the West Virginia University College of Law, also an expert on American public-private contracts and the outsourcing of core public functions to the private sector. The USPS has faced continuous financial shortfalls since 2006, but even a presidential push to privatize the service that delivers roughly 150 billion pieces of mail annually is unlikely without broad congressional and public support, Titolo said. 

QUOTES (on the history of the Postal Service’s budget problems) 

“The Postal Service has been a self-funding public institution since the 1970s, which means it largely pays its own way through the revenue it receives from delivering the mail. However, in the last few decades, the USPS has faced some budgetary challenges. In the digital era, much routine business has moved online. People are sending payments via apps rather than sending checks, which has reduced volume and thus postal revenue. And the USPS also faces competition from private providers such as FedEx and UPS. But the USPS had largely weathered these challenges.”

“The real source of this controversy lies elsewhere, in politics and ideology and in President Trump’s particular animus against the Postal Service. President Trump’s OMB issued a report early in his presidency that called for the privatization of the USPS. President Trump recently said publicly that ‘The Postal Service is a joke’ and called for the USPS to quadruple its rates. Needless to say, this would destroy the USPS as online retailers would simply shift to FedEx or UPS if it came to pass. The ultimate goal here seems to be to use the manufactured budget crisis to privatize the postal service.”

QUOTES (on the legality of privatization)

“From a legal and political standpoint, however, privatizing the USPS would be tricky. The USPS is an independent government agency that is overseen by a bipartisan, 11-member Board of Governors, nine of whom are appointed by the president for seven-year terms. It was established by an act of Congress. Hence, President Trump lacks the power to privatize the Post Office himself by fiat. Even if the president stacked the board with loyalists, as he is now doing, privatization would require congressional action, which is unlikely given the broad public support for the Post Office. If anything, the political winds seem to be blowing against USPS privatization. A bill called the USPS Fairness Act was recently passed in the House of Representatives that would end the pension pre-funding requirement and help place the USPS on a sound financial footing. The bill is currently stalled in the Senate. Others have called for the USPS to provide public banking services as a way to make up lost revenue from declining mail services.”

“It would take an act of Congress to privatize the USPS, which I believe is unlikely (albeit not impossible).” 

QUOTES (on public support and the history of USPS)

“It’s important to appreciate the high value that Americans have always placed on the government-run postal service, which is a core government function, with a mandate to serve the general public. The U.S. Constitution, Article I, Section 8 grants Congress the power to create “post offices and post roads,” making the postal service one of the few government services actually spelled out in the Constitution. The framers of the Constitution were committed to the idea of the Postal Service as a way of binding together a far-flung nation into a democratic republic. While this is a time of low trust in the federal government overall, it enjoys the highest degree of trust and confidence of any government agency, with an astonishing 90 percent of Americans saying they approve of the post office, the highest of any public institution. Privatization is the brainchild of Wall Street private equity investors looking to turn public goods to private profit for investors. There is little public support for this initiative among the general public.” — Matthew Titolo, Professor, WVU College of Law 

West Virginia University experts can provide commentary, insights and opinions on various news topics. Search for an expert by name, title, area of expertise, or college/school/department in the Experts Database at WVU Today.



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