AUS
NZ
UK
CA
USA
IND
Summary
- The USPS is facing an acute financial crunch due to the COVID-19 health crisis with Postal Service claiming to run out of cash if package volume returns to pre-pandemic levels.
- The Postal Service has also warned states that it might not be able to deliver the last-minute mail-in ballots amid postal service disruptions.
- With fear prevailing that voters’ ballot may not get delivered in time, the agency has sent letters to the states to request residents to order ballots at the earliest to avoid delay in voting.
- The US president has agreed to sign a bill to support the collapsing postal service.
The United States Postal Service, an essential service used by millions of Americans every day, is suffering financial difficulty due to the novel coronavirus (COVID-19) pandemic. The US, which will undergo national elections in November, now fears voters’ ballot may not get delivered in time amid postal service disruptions.
The Postal Service recently warned states that it might not be able to deliver the last-minute mail-in ballots. The USPS general counsel, Thomas J. Marshall, sent letters in July to all 50 states and the District of Columbia that “certain deadlines for requesting and casting mail-in ballots are incongruous with the Postal Service’s delivery standards.”
As per the law in many states, residents can request ballots on short notice period, but Mr Marshall urged those with tight schedules to require the ballots be requested at least 15 days before an election. Amid coronavirus pandemic crisis, many states in the US have turned to vote-by-mail operations to carry out elections safely.
Democrats and voting rights advocates have criticised the Postal Service and the US President Donald Trump saying the president is deliberately inviting baseless concerns that voting by mail will lead to fraud and miscounts and that they are casting doubts about the outcome of the election.
Also Read: November is around the corner, Who is Wall street betting on?
On Thursday, President Donald Trump walked back on his statement that he would reject a hypothetical $25 billion emergency funding grant to USPS. The president announced that he would agree to sign an urgent bill to support the US Postal Services.
How did USPS come to existence?
The United States Postal Services has its roots to 1775 during the Second Continental Congress. The Post Office Department was established in 1792 with the introduction of the Postal Service Act, and then-President Benjamin Franklin appointed as the first postmaster general.
In 1970, getting encouraged by the ongoing Civil Rights Movement, postal workers in New York City organised a strike against the United States Government over low wages and poor working conditions. Slowly it spread across the US, and it gained support from other states, postal workers, as well. Later the union received what they wanted in a contract along with the Postal Reorganization Act signed by President Richard Nixon. A new federal agency, the United States Postal Service came to existence with replacing the cabinet-level Post Office Department, and it took effect on July 1, 1971.
2020 Postal Crisis
This year, the USPS implemented operational changes under newly appointed Postmaster General Louis DeJoy. During the 2007-2008 financial crisis followed by the recession, the services faced a drop in the mail volume, and current coronavirus pandemic has caused similar issues to the services. Upon taking office, DeJoy announced significant changes like banning over the timing or extra trips to deliver mails, to reduce overall costs. It caused widespread criticism, and DeJoy admitted the measures created a delay in delivery. However, he soon assured things would get on the track after some time. But the recent letters to the states over ballots delay has raised concerns in the US.
Also Read: Can stock markets indicate political transitions? S&P500, ASX200 and debate around the presidency
According to the Washing Post, the USPS has $160 billion unfunded liabilities towards pre-paid pensions and health plans. The Postal Service is burdened by 2006 federal legislation under which it requires to fund 75 years of employee pension and health benefits in advance. In 2019 the service saw annual net losses double to $8.8 billion.
The Postal Service now claims that if package volume returns to pre-pandemic levels, it will run out of cash by April 2021. Even if the package volume stays 15% above pre-crisis level, the agency said it would face liquidity crunch in October 2021.
The US Postal Services not just deliver election mail and ballots but also essential documents, packages, medicines and even letters to Santa Claus. The USPS stamps are also very famous amongst the customers as they launch creative stamps regularly and various special occasions like festivals or public holidays. The carrier is considered one of the affordable services than the private ones, as it delivers to the remote areas where it isn’t profitable for other private companies.
Over half a million people, including 100,000 US military veterans are employed at the USPS, and the agency does not work on taxpayers’ money but entirely dependent on its revenue from mail and package delivery services.
Since the 1990s the Republicans are discussing the idea of privatising the USPS. The Donald Trump administration also proposed privatisation plan in 2018, which received firm bipartisan opposition from the Congress.
Current situation amid elections in November:
On average, the Postal Service delivers about 425 million mails, and the agency estimates that the election mails account for less than 2% from all mail volume from mid- September to Election Day. The agency believes that it can handle the increase of election mails due to the COVID-19 pandemic. But it urges residents to do their part by requesting ballot as soon as possible. To have the vote counted, the residents need to order the ballot now and mail it back in advance.
