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How a crippled postal service can hinder November elections unless it bows down to Trump's tariff hike demands

Revenue of USPS has plummeted due to mail volume dropping more than 30% from last year
(Getty Images)
(Getty Images)

The Covid-19 crisis has definitely exacerbated problems for the US Postal Service, especially since it has been losing money for nearly a decade. Now, this could have some major ramifications in the upcoming general election in November.

Despite having long been America's most popular public agency, the USPS has frequently faced financial challenges. And since revenue has plummeted due to mail volume dropping more than 30% from last year, these challenges have only escalated during the pandemic.

According to federal officials, things are only going to get worse in the coming months.

Last month, Postmaster General Megan Brennan told Congress that the service could lose more than $23 billion over the next 18 months. In fact, the USPS is expected to run out of funds by the end of September without a government bailout.

US Postal Service worker Lou Martini goes about his daily delivery route during the coronavirus pandemic on April 15, 2020, in Kings Park, New York (Getty Images)

Meanwhile, there is an ongoing debate in Washington about financially assisting the agency, raising concerns that postal services may be crippled by November — thereby affecting election officials, voting procedures, and the general election itself.

"This whole issue of elections and the US Postal Service and the liquidity of the Postal Service really does impact the administration of elections and frankly the ability to conduct elections," Michael Vu, the San Diego County registrar of voters, told the San Diego Union-Tribune. "It is not just about the voting process; it is also about the (voter) registration and list maintenance processes as well. There are core overall aspects of the election process that have huge tie-ins to the US Postal Service."

There is no doubt that the USPS plays an indispensable role in multiple facets of the election.

Voters who are stationed abroad without choice, such as active service members, almost rely entirely on the Postal Service to cast their respective ballots.

Moreover, political mailers and pamphlets at local, state, and federal levels also reach potential voters via the Postal Service, albeit the advent of social media has furnished some much-needed alternatives.

However, election officials across the country are expecting the USPS to play a significant role in the November election in the wake of the coronavirus pandemic.

They predict that hundreds of thousands of voters would request mail ballots as they are apprehensive about voting in-person during the pandemic.

And according to several election experts and voting advocates, a crippled USPS could potentially leave millions of voters in the lurch.

A voter fills out a ballot at the Minneapolis Early Vote Center on January 17, 2020, in Minneapolis, Minnesota (Getty Images)

Furthermore, there could be several delays in voters receiving their ballots if there are any reductions to USPS staff, service hours, or delivery days. This would, in turn, result in delays in registrars getting them back and ensuring those votes are counted.

Congress allocated a $10 billion loan for the Postal Service as part of the CARES Act relief package, but President Donald Trump has blocked the loan until the service complies with his demand that they substantially increase shipping costs for online retail behemoths such as Amazon.

There is a growing push by Democrat lawmakers to expand vote-by-mail across the country due to the pandemic. Republicans, however, oppose the same due to concerns of ballot tampering.

Trump has also echoed similar concerns, saying vote-by-mail procedures are rife with fraud and detrimental to Republicans' electoral chances. Considering this, his opposition to full USPS funding may only harden with time.

According to a task force set up by the Trump administration, the USPS should have more flexibility to raise rates for packages in order to become profitable. Something that could hurt the profits of large online retailers.

The task force noted how the Postal Service has been losing money for more than a decade — recording close to $4 billion in losses in fiscal 2018 despite an increasing number of package deliveries.

This is partially due to loss of revenue from letters, bills, and other ordinary mail in a more-or-less digital economy. However, this has not been offset despite the explosion in deliveries from online shopping due to their cheap rates.

The president has often slammed Amazon for treating the USPS as its "delivery boy," saying it pays way lesser than it should for deliveries.

President Donald Trump talks to reporters before leaving the White House for the G20 summit on June 26, 2019, in Washington, DC (Getty Images)

"(T)hey lose money every time they deliver a package for Amazon or these other internet companies," Trump said of the Postal Service at a recent briefing. "If they'd raise the prices by actually a lot, then you'd find out that the post office could make money or break even."

Meanwhile, the Package Coalition, which includes Amazon and several other online retail giants, have warned against such a movie.

“The Package Coalition is concerned that, by raising prices and depriving Americans of affordable delivery services, the Postal Task Force’s package delivery recommendations would harm consumers, large and small businesses, and especially rural communities,” the group said in 2018.

But this doesn't mean that recommendations made by the task force — such as price hikes — cannot be implemented by the agency. 

In fact, they have previously recommended that the USPS has the authority to charge market-based rates for non-essential deliveries.

“Although the USPS does have pricing flexibility within its package delivery segment, packages have not been priced with profitability in mind. The USPS should have the authority to charge market-based prices for both mail and package items that are not deemed ‘essential services,’” the task force said in 2018.

Of course, this would mean bad news for global behemoths like Amazon — which ships billions of packages to its customers while raking in massive profits every year.