Mr. Chairman, I have an amendment at the desk. Mr. Chair, I rise on behalf of more than 68 million Americans who lack access to adequate banking services. They are often shut out of banks because of…
Mr. Chairman, I have an amendment at the desk.
Mr. Chair, I rise on behalf of more than 68 million Americans who lack access to adequate banking services. They are often shut out of banks because of fees tied to minimum balances, overdrafts, direct deposit penalties, and, of course, ATM charges. Or, worse, many live in bank deserts because, incredibly, even in 2019, their community lacks a bank or credit union altogether.
This leaves underbanked Americans to turn to unregulated, predatory payday lenders and check cashers that level obscene annual percentage rates. These parasitic institutions keep families in poverty and further cement the economic inequality which tears our country apart.
It does not have to be this way. Our United States Postal Service is in a unique position to provide affordable, consumer-driven financial services these millions of Americans need. With branches in every ZIP Code, from Paterson, New Jersey, to Elko, Nevada, to Barrow, Alaska, the post office's unmatched reach offers a world of opportunity.
In 2014, the USPS inspector general determined that the Postal Service is well positioned to expand its financial services offerings, which currently includes money orders, check cashing, and prepaid debit card services. The IG's report found there is a significant demand for these services from populations underserved by private banks that the Postal Service could fill perfectly.
It is difficult to overstate what this small change would do, Mr. Chairman. Postal banking would benefit Americans from every walk of life. Ninety percent of ZIP Codes lacking a bank or credit union are in rural areas. Bank branches are also sparse in low-income urban areas. Approximately 46 percent of Latino and 49 percent of African American households are underbanked.
Think about that. Democrats and Republicans alike could derive enormous benefits for their constituents. Talk about uniting America. It is a practical thing.
In a second study the USPS inspector general conducted in 2015, the IG concluded that expanding the Postal Service's current financial services offerings would not even cost much, is fully permissible under current statutory authority, and could generate $1.1 billion in additional revenue for the Postal Service, annually, after 5 years.
You know what has happened to the Postal Service and how in debt the Postal Service is because of a few foolish rules that are on the books.
This is not a novel concept. Postal services in 139 countries around the world offer some form of financial services, including every other developed country in the world.
Students of history can recall that the United States had a legendary Postal Savings System up to 1967--started in 1911--and managed over $3.4 billion in assets, or $35 billion in today's dollars, at the peak of its use. I want America to back those successes.
Mr. Chairman, I include in the Record an essay I wrote for the Washington Monthly on modernizing the U.S. Postal Service to make the institution thrive once more and benefit tens of millions of Americans in the process. The piece was titled, ``Congress Is Sabotaging Your Post Office.''
[Apr./May/June 2019]
Congress Is Sabotaging Your Post Office
(By Bill Pascrell, Jr.)
The Larry Doby Post Office is located at 194 Ward Street in
Paterson, New Jersey, across the street from my congressional
office. Dedicated on August 28, 1933, by the legendary
Postmaster General James Farley, the structure was one of the
many built by Franklin D. Roosevelt's administration in the
throes of the Great Depression. While it may not have one of
the stunning murals created by Roosevelt's Section of
Painting and Sculpture, I still marvel at the managed
grandeur of its deco buttressing, the green glow of the
elevated banker's lamps off the marble walls, and the banks
of brass P.O. boxes. My hometown has bounced like a cork in
seas of social tumult, but the Ward Street post office has
endured as I've always known it.
There is a cynical trope that Congress spends too much time
naming post offices, but I don't view the matter as
insignificant. Post offices are open gates to American
history and markers of an optimistic past. Even as
smartphones and electronic communication permeate every
crevice of daily life, the United States Postal Service
(USPS) forms a lifeblood circulatory system connecting every
community in the Union. For this reason, my work to rename
the Ward Street building for Doby, an African American
baseball legend and favorite son of Paterson, remains a
highlight of my career.
Unfortunately, when it comes to Congress and the post
office, the problem isn't too much affection. For decades,
Congress's attitude toward the post has ranged from neglect
to hostility. As a result, the USPS is struggling. In
November 2018, it announced a net decline of $3.9 billion,
continuing a twelve-year negative run.
The agency has been subjected to withering criticism by a
spate of congressional hearings and Government Accountability
Office analyses. A recent task force created by President
Trump labeled the Postal Service's financial path
``unsustainable,'' and recommended changes that would push
the post closer to complete privatization. Under mounting
political pressure, the post office itself has endorsed
draconian layoffs and proposed ending Saturday delivery,
among other savage cuts.
What is causing all these troubles? Is the Postal Service
hopelessly outdated and dysfunctional? No. While it's
tempting to think of it as a mastodon from the pre-internet
era, the post remains one of the most impressive enterprises
on earth.
The USPS handles 47 percent of the world's mail, delivering
nearly 150 billion mail pieces annually. It delivers more in
sixteen days than UPS and FedEx, combined, ship in a year.
The agency has roughly half a million career employees spread
out across almost 31,000 locations. Post offices are tucked
into every state, across far-flung Native American
reservations, and in remote protectorates. If it were a
private business, the post would rank around fortieth on the
Fortune 500. And you can send a letter from coast to coast
for two quarters and a nickel--less than the cost of a candy
bar.
Not surprising, then, that Americans consistently rank the
post office among the most popular arms of government. A
February 2018 poll by the Pew Research Center, for example,
found that 88 percent of Americans have a positive view of
it. That's higher than the approval ratings for the Centers
for Disease Control and Prevention, the Federal Reserve, and
the Federal Bureau of Investigation.
It's true that technological change has affected the Postal
Service's fortunes. As people send fewer and fewer letters,
the volume of first-class mail continues to tumble; between
2016 and 2018, it dropped by more than 4.5 billion pieces.
This depresses the post's revenue, forcing it to take on more
debt, which in turn puts it under greater financial pressure.
But as online shopping slowly replaces in-person retail, the
post is sending and delivering more packages than ever
before, which compensates somewhat for lost revenue. Lower
mail volume is not the main issue.
In reality, most of the post's wounds are politically
inflicted. In the early 1970s, Congress passed legislation
that shoehorned the agency into a convoluted half-public,
half-corporate governing structure, to make it operate more
as a business. And in 2006, Congress required that the Postal
Service pre-fund its health benefit obligations at least
fifty years into the future. This rule has accounted for
nearly 90 percent of the post's red ink since.
For the most part, these harmful ``reforms'' have
originated on the political right. To argue that the Postal
Service needs to be privatized, conservatives need to show
that it is dysfunctional, and there's no better way to do
that than by weighing the agency down with impossible
financial obligations. It continues a generation-long pattern
of institutional vandalism by Republicans across government.
But ultimately,
both parties bear responsibility. I should know: I was in
Congress when we passed the 2006 bill. And, along with all my
colleagues, I made the mistake of voting for it.
But the good news is that just as Congress put the Postal
Service on its current dangerous trajectory, so can Congress
put it on a sustainable path, bringing our cherished
institution back to full health. In fact, I believe we can go
even further. With its massive infrastructure network, post
offices could revolutionize how the American people perform a
variety of essential tasks, from voting to paying taxes to
banking. Tapping into this network has the potential to
revitalize both the Postal Service and our democracy. Instead
of discussing how to cut the post office, we should be
talking about how to expand it.
Arguments about whether the post should operate like a
business date back to America's founding. While debating the
original Post Office Act, a group including Alexander
Hamilton argued that the post should support itself and make
money for the rest of the government. Others, including
George Washington and James Madison, didn't seem to care
whether it turned a profit. Jonathan Trumbull, the speaker of
the House of Representatives in 1792, observed that having
the post subsidize the circulation of periodicals would be
``among the surest means of preventing the degeneracy of a
free government.'' In the end, Washington and Madison won the
day. The government allowed printers to ship their newspapers
and magazines at a very low cost: one cent to destinations
within 100 miles, and one and a half cents to destinations
more than 100 miles away. This set off what one researcher
called ``the greatest explosion of newspapers in history''--
and with it an explosion in literacy.
By the mid-nineteenth-century mark, the Washingtonian view
of the post as a public good was deeply entrenched. An early
congressional postal commission posited that the post office
existed not for generating revenue but for ``elevating our
people in the scale of civilization, and binding them
together in patriotic affection.'' Legislation enacted
between 1845 and 1851 codified inexpensive letter postage and
further redefined the post's place in public life. The
ratification of these reforms signaled the full defeat of the
idea that the post must be independent. It was entitled to
government support, deficits be damned.
Over the ensuing hundred years, the post would usher in a
second American revolution. Delivery of home mail
precipitated road building and allowed Americans to fan out
and settle across the nation. Postal contracts sustained the
construction of transcontinental railways that would have
otherwise been economically unsustainable. And it was the
post office, not the military, that got the U.S. government
to finally invest in aviation and help birth commercial
flying.
The post has also been an agent of upward social mobility.
For generations, African Americans were locked out of good
government jobs. But as the federal bureaucracy began to
desegregate, black workers joined the USPS en masse. Under
the Harding and Coolidge administrations, black people made
up between 15 and 30 percent of postal employees, making the
agency one of America's foremost incubators of the black
middle class. The post also factored significantly into
Roosevelt's efforts to fight the Great Depression. Between
1932 and 1937, the government built more than 1,300 post
offices. Many were enhanced with the beautiful murals FDR
believed would bring art to the nation. The agency's central
role in America's development was perhaps best summarized in
the Postal Policy Act of 1958, when Congress declared that
the post was ``clearly not a business enterprise conducted
for profit'' but a public service designed to promulgate
``social, cultural, intellectual, and commercial intercourse
among the people of the United States.''
But, in the 1960s, that view began to change. After years
of underinvestment relative to the rise in demand for its
services, the post faced a huge mail backlog in Chicago. Ten
million pieces of undelivered mail piled up in the city, and
the Lyndon Johnson administration established a commission to
look into the agency. It was headed by a former AT&T chairman
and stacked with CEOs and business school deans. In 1970, the
post office was wracked by a debilitating worker strike. The
backlog and the strike spurred a political overreaction.
Following the strike and the commission's 1968
recommendations, Congress passed the Postal Reorganization
Act of 1970, which exiled the postmaster general from the
president's cabinet and downgraded the post office from a
federal department to an independent federal agency.
Ostensibly designed to modernize the post and free it from a
history of patronage, the legislation proved profoundly
shortsighted. It required that the post largely pay for its
operations out of its own revenues, and it split leadership
of the Postal Service between the postmaster general and a
board of governors, the latter of which has been largely
dominated by technocrats who see the post foremost as a
business. At the same time, however, the post was still
subject to congressional oversight. It's hard to imagine any
corporation that would agree to operate under this peculiar
hybrid structure. Even today most Americans don't realize
that despite their reliance on it, our post is not a part of
the government in the same way as the Department of
Agriculture or the Pentagon, and receives effectively no
support from the federal budget.
Unfortunately, the 1970 bill was only the first in a series
of legislative blows against the post. From 1808 until 1995,
Congress had a full congressional committee for the Postal
Service. But as part of his war on government, Speaker Newt
Gingrich relegated its duties to the present-day Oversight
and Reform Committee, where they were assigned to a postal
service subcommittee. In 2001, the Republican House majority
disbanded the subcommittee altogether.
But the most destructive change of all was the Postal
Accountability and Enhancement Act (PAEA). The bill has an
unfortunate history. It was hurried to the floor during a
lame-duck Congress weeks after Republicans were routed from
their twelve-year congressional majority in the 2006
midterms. Committee leaders told us that the legislation was
critical to ``saving'' the post, and we were rushed into
voting for the bill without fully considering its motivations
or long-term impacts. The legislation was passed by voice
vote--without objection. It was a blunder, one of the worst
pieces of legislation Congress has passed in a generation.
While the PAEA included some positive measures, including
giving the post increased autonomy over its rates, the law
generally tightened a noose around the USPS. It further
narrowed the post's charter and prohibited the Postal Service
from engaging in new activities outside of mail delivery. The
law's most destructive section, innocuously labeled ``Postal
Service Retirement and Health Benefits Funding,'' imposed an
unusual requirement on how the post covers its employee
health pensions. Prior to 2006, the post funded its pensions
like all agencies: pay as you go. Now, however, the agency
had to pre-fund the health care benefits of employees at
least fifty years in advance. To meet this requirement, the
post was obligated to place approximately $5.5 billion into a
pension fund each year between 2007 and 2016, followed by
additional large annual payments.
The measure has been a fiendish straitjacket, akin to
making a prospective homeowner cover an entire thirty-year
mortgage before the ink is dry on the deed. The provision is
even more onerous given that the government requires the
treasury to invest all postal workers' retiree money in
government bonds, guaranteeing miniscule returns.
Unsurprisingly, the post has defaulted on all of its pre-
funding payments since 2011, to the tune of at least $40
billion. In each of the last three years, the pre-funding
burden well exceeded the post's total losses. Overall, pre-
funding accounts for almost all of its losses since 2006.
No other agency or department is subject to this
requirement. So why is the Postal Service? The George W. Bush
administration demanded its inclusion and used the savings it
generated to try to balance the budget. Dutiful Republicans
said it was necessary to ensure that the post doesn't
generate a ``huge unfunded liability'' that would require a
bailout from the government, an absurd posture they still
maintain. But the requirement's main upshot has been to
plunge the Postal Service into a perpetual fiscal crisis that
in turn justifies further attacks from the right. Full
privatization is still neither politically nor logistically
feasible, but that won't stop Republicans and their allies
from trying.
Trump's recent Postal Service task force fits into the
gradual push toward privatization. The task force's ultimate
conclusion bore all the hallmarks of a far-right hit job.
Rather than focusing on the Postal Service's pre-funding
provision--which the final report actually recommended
keeping--the task force emphasized the supposed need to lower
Postal Service delivery standards and eliminate employees'
collective bargaining rights. The task force also recommended
diluting the post's universal service guarantee, which would
wreck the agency's functionality in rural communities. In a
country where rural citizens already feel detached from the
rest of the nation, such an outcome would only widen existing
cleavages. Convened in secret, Trump's task force was
designed with the Orwellian purpose not to save the post, but
to further weaken it.
I am heartened that Democrats routinely unite to oppose
privatization. But merely saying that the post should not be
privatized comes from a defensive posture. The solutions we
pursue must be bolder.
Any serious reformation of our post begins with eliminating
the odious pre-funding anchor. But that's only the start. To
really improve the agency, we need to fully reject the idea
that it should be run like a business. There is a reason why
the Founders made the Postal Service a federal department,
and there's a reason why it remained that way through the
better part of the twentieth century. Policymakers wanted to
make sure that Americans could affordably send and receive
mail from anywhere. In pursuing that aim, the USPS has played
a key role in developing our country. To that end, we should
evaluate reviving the U.S. Post Office Department and making
the postmaster general a cabinet official once more. It's
time that we again treat this agency like a public good
rather than a private business.
Nowhere is this perspective needed more than in Congress.
In the House and Senate, we have become hostages to a fiscal
imprisonment outlook, viewing almost every question through
the single calculation of whether it will raise or lower
revenue. Republicans have used the specter of deficits as a
cudgel to beat back funding increases for all departments and
programs. Browbeaten, too many
Democrats have gone along. But while deficits matter, the
Postal Service isn't running losses because it's inefficient.
It's running losses because of political sabotage.
It's time for Congress to admit that the hybrid structure
it sanctioned forty-nine years ago is not sustainable. So
long as the post exists half as a business and half as a
public enterprise, forced to make money even as it is
constrained by preposterous rules and counterproductive
meddling, it will wobble and teeter. Meanwhile, privatization
advocates will continue to chip away at one of the world's
most impressive agencies.
That doesn't mean the Postal Service should be free of
interrogation. The post, for example, must fix its deal with
Amazon. The company ships perhaps two-thirds of its packages
through the public mail, and its pricing and delivery terms
are separate from those afforded to other businesses that
ship through the post. This comes courtesy of a secret 2013
negotiated service agreement whose provisions have been
hidden from even Congress. The secrecy suggests that Amazon
is getting a deal other retailers don't enjoy.
There is some logic for a deal between the post and Amazon.
But if the world's best delivery system is awarding Amazon a
volume discount, it makes it more difficult for the company's
competitors to challenge Amazon's prices. This sets a
dangerous example for competition policy. The U.S. Postal
Service is a public facility. It should not be used to
further entrench the monopolistic power of a private company.
Nor does it need to. Amazon does not have the post's
infrastructure, and Jeff Bezos's vaunted delivery drones
aren't yet operational. The Postal Service's biggest rivals,
UPS and FedEx, simply can't match the agency's services. In
negotiations, the post should take a harder line and force
Amazon to pay more.
Congress can help spur the Postal Service into bargaining
harder by using its hearing power to make the current Amazon
deal public. Given that Congress has paid so little attention
to the agency in the past, this kind of engagement is sorely
needed. Currently, the House subcommittee that deals with the
USPS is responsible for monitoring a mind-boggling number of
other federal functions and agencies, including (but not
limited to) government management and accounting; federal
property; intergovernmental affairs. including with state and
local governments; and the entire civil service. It's no
wonder the post has become of tertiary importance in the
people's house. Between 2005 and 2018, the House Oversight
Committee held 417 hearings, of which just seven were related
to postal issues. This negligence helps explain why
legislation that kneecaps the USPS, like the 2006 Postal
Accountability and Enhancement Act, glides through Congress
before members really consider its consequences.
The two House members with the most control over postal
issues, House Oversight Committee chairman Elijah Cummings
and government operations subcommittee head Gerry Connolly,
are champions of the Postal Service, and I believe they will
dedicate attention to the issues facing the agency. But both
of their bodies are swamped with other valuable work,
including bringing needed oversight to the river of
corruption flowing from the Trump administration. Over the
next few years, Congress should therefore consider bringing
back the full Postal and Civil Service Committee or, at the
very least, creating an exclusive postal subcommittee.
To truly move beyond playing defense, however, Democrats
need to reimagine what the Postal Service can do. It is,
after all, one of the most remarkable physical systems ever
created. With arms in every single zip code, from Key West,
Florida, to Utqiagvik, Alaska, its expansiveness opens up a
world of opportunity.
In many American communities, the post office was
historically called the ``federal building,'' and it served
as a one-stop shop for numerous governmental needs.
(Tellingly, FDR wanted Social Security to be administered
through posts to assure its accessibility.) In smaller towns
and cities, for example, the post office was a focal point
for immigrant registration, military recruitment, and
distributing income tax forms. There is no reason that
America's post offices can't again provide a variety of
important governmental functions. Indeed, today's post
offices should have all tax forms readily available. The
government should even consider stationing IRS adjutants at
post offices around tax time, which would ease what is, for
many Americans, one of the most stressful times of the year.
The Postal Service could also expand on the passport
assistance it already provides. Many post offices take
passport photos and process some first-time applicants and
renewals. Often, this is by appointment only. I believe that
post offices should offer full passport services to any
American who walks through the doors. In addition to serving
as a gateway to America's bureaucracy, the post could serve
as a door to the rest of the world.
State governments should take advantage of America's postal
infrastructure as well, in particular by expanding the use of
vote by mail, which when done right is proven to increase
political participation. Turning mailboxes into voting booths
would therefore be good for the engagement of our citizenry.
The post could further weave itself into American democracy
by allowing congressional representatives to station their
district staff right in community post offices.
But perhaps the most promising service that post offices
could provide is banking. Today, sixty-eight million
Americans, more than a quarter of U.S. households, lack
access to adequate banking services. Many are shut out by
high fees tied to minimum balances, overdrafts, direct
deposit penalties, and ATM charges. As a result, they are
left to unregulated payday lenders and check cashers that
level obscene annual percentage rates. The postal inspector
general found that underbanked Americans spend $89 billion
each year on financial fees. This closed system shackles
families to poverty, further cementing the economic
inequality tearing our country apart.
Postal branches could offer a range of banking services--
including savings accounts, deposit services, and even small
lending--at a 90 percent discount compared to what predatory
lenders provide, according to a report commissioned by the
USPS inspector general. This would give many families an
average savings of $2,000 a year while putting nearly $9
billion into the post's coffers.
Postal banking could even unite liberals and Trump
supporters. Rural communities are America's most bank
starved: 90 percent of zip codes lacking a bank or credit
union lie in rural areas. Bank branches are also sparse in
poorer urban areas, and 46 percent of Latino and 49 percent
of African American households are unbanked. The Postal
Service is well positioned to help both communities. Some 59
percent of post offices lie in ``bank deserts,'' or places
where there is no more than one branch. Where financial
institutions close their doors to these communities, post
offices remain open to anyone who walks inside. And this
change wouldn't even need the approval of Congress, requiring
only the postmaster general's consent. Pilot programs could
then begin immediately--including in places like 194 Ward
Street in my own city of Paterson.
Ultimately, these reforms would expand on the post's
democratic tradition. For centuries, the agency has connected
far-flung parts of the country at little cost. Letting it
help citizens pay their taxes, obtain passports, vote, and
bank would better connect Americans with their federal
government. In doing so, these reforms could help mend our
citizenry's chronically low confidence in the federal
government. They could also make the agency's contribution to
public life--already enormous--more visible to the people it
serves. And that would make it more difficult for anti-
government zealots to tear the agency apart.
It is high time that we as a body come together to enact sensible postal reform. This amendment is a small step in that direction.
Mr. Chairman, I thank Representative Pressley and Representative Amodei for joining me in offering this bipartisan amendment. I strongly encourage my colleagues to join me in supporting this amendment, and I yield back the balance of my time.