Lawmakers on Wednesday examined ways to put the United States Postal Service (USPS) back on a sustainable financial path, after it lost nearly $60 billion over the previous decade.
Barely mentioned during the proceedings before the House Oversight Committee, however, was one populist proposal that could not only rescue the post office, but put Wall Street in check: postal banking.
The policy would allow the USPS to offer checking account and bill paying services to communities underserved by the financial sector. Post office branches offered these services from 1910 until the 1970’s to cater to working class Americans who, shaken by financial crashes, had lost faith in the for-profit banking system.
Rep. Ted Lieu (D-Calif.) asked Postmaster General Megan Brennan on Wednesday if she supported bringing back postal banking. Brennan responded that she would “need to look at that through a business prism.”
“Can we execute effectively? Can we grow profitable revenue? And is this a service that is not offered in the public sector?” she explained.
“Okay,” Lieu replied, seemingly unsatisfied with the answer.
It was the only reference to the proposal during the hearing.
The USPS’s financial woes are due largely to declining mail volume and Bush-era regulations that drained its financial reserves. The 2006 Postal Accountability and Enhancement Act required the agency to pre-fund retiree health benefits to the tune of five billion dollars annually—a liability largely unheard of in any other government agency or private company.
Postmaster General Brennan asked the committee to look at a number of legislative reforms, including giving the USPS more flexibility over pricing and services. One proposal would allow for the mailing of booze.
Brennan also advocated for future retirees to be moved on to the rolls of Medicare instead of federal health benefits. Brennan stated that the switch could save the post office $17.5 billion over the next five years.
Some of those initiatives are included in legislation introduced by Sen. Tom Carper (D-Del.), which is currently being considered by Senate Homeland Security and Government Affairs Committee.
Not on the table, though, is postal banking which, according to the USPS inspector general, “could help the Postal Service generate new revenue to continue providing universal service.”
In a report last May, the watchdog stated that post office is “well suited” to take up the task thanks to its infrastructure and workforce training. The IG estimated that bringing back postal banking could inject $8.9 billion annually into the USPS.
It also noted that the proposal “could benefit the 68 million underserved Americans who either do not have a bank account or rely on expensive services like payday lending and check cashing.”
Sens. Bernie Sanders (I-Vt.) and Elizabeth Warren (D-Mass.) have introduced legislation to re-instate postal banking.
“We can have our Postal Service provide modest banking to low-income people where they can cash their checks and they can do banking,” Sanders said last year.
