Every year, the United States Postal Service
takes and delivers 142 billion mailed items.
If it needs to go from point A to point B
anywhere in the US, the post office can do it.
It survived the Civil War, two world wars,
the Great Depression, and the upheaval
brought by the internet and email.
But it's currently more than $160 billion in debt,
and it's telling Congress it will run out of cash
by September and needs a $75 billion infusion.
How did this happen?
The US Postal Service has been delivering mail
since before the Declaration of Independence
was even signed.
In 1775, Benjamin Franklin was appointed postmaster general,
and it was Franklin who handled the distribution of letters
from Congress to its armies during the Revolutionary War.
President George Washington signed the Postal Service Act,
which authorized Congress to create the US Postal Service.
This established routes and made it illegal
to open anyone's mail.
Clip: What matter if it took two weeks
to go from New York to Atlanta,
over a month to St. Louis?
If the letter from Uncle Ben
arrived a day or so later, nobody fussed.
Narrator: In 1823, it started using waterways
to deliver mail, then began using railroads.
1847 saw the first issued stamps.
And then the famed Pony Express debuted in 1860.
In 1896, it began delivering to some rural addresses,
meaning residents no longer had to go
to the town post office to get their mail.
By 1923, all houses were required to have a mail slot.
And in 1963, zip codes made their debut.
Clip: What a system! As you can plainly see,
just five little numbers, quick as can be.
Narrator: But what really transformed the post office
into what we know today?
That happened a few years later.
Clip: The post office stands to be swamped,
overwhelmed, drowned in a sea of mail.
Where do we go from here?
Narrator: In 1967, the postmaster general
testified before Congress that the post office
was in "a race with catastrophe."
There were all sorts of backlogs,
and sorting-room floors were bursting with unsorted mail.
Combined with a postal worker strike in March of 1970,
led to the Postal Reorganization Act
and established the United States Postal Service
as we know it today.
Clip: The Post Office Department
is leading the search for better ways to process
and dispatch mail in the shortest time possible.
Narrator: The act eliminated the post office
from the president's cabinet
and made the post office its own federal agency.
It was set up more like a corporation
than a government agency and had an official monopoly
on the delivery of letter mail in the US.
It also set up the elimination of the post office's
direct government subsidies,
which were completely phased out in 1982.
The post office has been operating
without any taxpayer money since.
Competition from UPS and FedEx made the post office
innovate on its offerings, like introducing express mail.
But since its most lucrative service was first-class mail,
the USPS didn't have to worry too much
about competing with other companies.
In fact, the post office has partnered
with both companies in the past,
like when it signed a deal in 2000
that contracted its air delivery of first-class,
priority, and express mail to FedEx.
So, basically, the USPS was fine.
First-class mail volume peaked in 2001
at 103.6 billion pieces of mail.
It operated at a loss in the first couple years
of the 21st century, but by 2003,
it was back to operating at a profit.
In fact, from 2003 through 2006,
USPS recorded a total $9.3 billion profit.
That all changed at the end of 2006.
Clip: HR 6407, a bill to reform
the postal laws of the United States.
Narrator: Enter the Postal Accountability
and Enhancement Act, which was passed
by the Republican-controlled Congress
and signed into law by President George W. Bush.
Up until this point, the post office
added to and removed from its retiree pension
and healthcare accounts on an ongoing basis,
putting money in as needed, based on its current retirees.
This model is similar to the way many other companies
and corporations fund their own healthcare pensions.
This act changed all that.
It required the post office
to calculate all of its retiree pension
and healthcare costs for the next 75 years,
including for people it hadn't even hired yet,
and put away enough over the next 10 years to cover them.
To put this in perspective,
that'd be like you only working from age 18 to 28
and then expecting to live on that income
until you were 103 years old.
The timing for this was not ideal, either.
Email, texting, and online payments had begun to chip away
at the post office's main business, first-class mail,
which had slowly been declining since its 2001 peak.
But even that decline
wouldn't put the post office in the negative.
If not for the 75-year pension and healthcare obligation,
the USPS would have reported operating profits
for the last six years.
Once the bill was enacted,
USPS had to contribute about $5.6 billion a year
for people who had not yet retired,
in addition to the normal amount for current retirees.
In 2006, prior to the new bill, this was $1.6 billion
for those who were already retired.
In 2007, USPS had to put away 625% more,
about $10 billion,
to cover both current and future retirees.
This gave the post office an annual loss
of more than $5 billion for the year.
Additionally, the new bill restricted
the post office's ability to set prices.
First-class mail, marketing mail,
and other products the post office
does not have a large competition for
were all tied to the consumer price index,
meaning it couldn't increase rates
for those products above the rate of inflation.
This has caused various problems, like in 2009,
when prices couldn't be raised at all on those products,
because there was no inflation.
The rule has created an environment where packages
are the post office's only profitable area.
By 2010, the post office's overall debt,
which was just over $2 billion in 2006,
had climbed to $12 billion.
It sounded the alarm to Congress multiple times
and was also the subject
of a 2018 Trump administration report
saying the pension obligation should be restructured.
But nothing changed.
In its most recent annual report,
the post office said it had incurred
almost $78 billion in losses
from 2007 to 2019.
It couldn't afford to make any payments
into the fund from 2012 to 2016
and now owes about $55 billion related to
its future pension and health benefit obligations.
Which brings us to today.
As with many other industries, the coronavirus
has taken its toll on the post office.
First-class and marketing mail have plummeted,
and the post office expects
a $13 billion decline in revenue.
The postmaster general has told Congress
she expects the USPS to be completely
out of cash by September.
This would make it unable to pay its employees
and could quickly cause disaster
in mail delivery across the country,
especially in rural areas not serviced by UPS and FedEx.
So, can it be saved?
The post office is now asking Congress
for a $50 billion cash infusion
along with a $25 billion loan.
The initial bailout bill Congress passed in March
provided $13 billion for the post office,
far less than the $25 billion
the organization was seeking in the bill.
However, President Trump threatened to veto any bill
that bailed out the post office,
so the bill was changed before signing
to a $10 billion loan,
13% of the $75 billion it had originally asked for
and another $10 billion to add to its debt.
And then, in early May, Trump appointed Louis DeJoy
the new postmaster general, and he will take the reins
of the organization on June 15.
Unlike the last three postmaster generals,
DeJoy is not a career employee; he is a large GOP donor
and the former CEO of a logistics company.
Democrats and ethics watchdogs
see the appointment as purely political,
not just because of Trump's desire
to reshape the post office,
but also because millions of Americans
may be forced to vote by mail this year,
which means the future of the post office
is likely to become a political issue
this spring and summer,
especially if its cash flow starts running dry.
And those at risk?
The 497,000 Americans who rely on the USPS for their jobs,
and the 329 million Americans
who rely on it for paying bills, medication,
and everything else the USPS delivers
through rain, sleet, snow, and even pandemics.