President-elect Donald Trump has expressed his interest in privatizing the United States Postal Service, which faces multi-million dollar financial losses and causes a large fiscal imbalance in the balance sheets of public activity.
According to a report in The Washington Post, Trump discussed this possibility with Howard Lutnick, his choice for Secretary of Commerce, at his residence in Mar-a-Lago, in Palm Beach, Florida.
The details of this conversation were provided by three people close to the topic. After learning about the annual losses of the US Postal Service, Trump indicated that the government should not continue to subsidize the agency
. According to the Washington Post, Trump would have discussed this possibility with Howard Lutnick
In the last fiscal year ending September 30, the postal service recorded a loss of $9.5 billion, significantly higher than the $6.5billion in losses the previous
year.
Despite generating operating revenues (which does not constitute a benefit) close to $80 billion, the agency attributed its financial difficulties to non-cash contributions for workers' compensation, such as pensions and health care, which has increased its problems.
Effects of the privatization of the USPS:
Privatizing the postal service could have profound repercussions on several industries. It could encourage small businesses and rural communities to restructure and have a more comprehensive service, and it would also create hundreds of thousands of private jobs
.
In addition, it could positively transform the e-commerce landscape, given that companies like Amazon use the postal service for “last mile” delivery, that is, the final journey from distribution centers to customers' homes or businesses.
Trump's relationship with the postal service has historically been tense. During his first term in office, in the early days of the pandemic, the president aptly described the postal service as “a joke” and stated that he would not provide any stimulus loans unless the agency increased its package rates considerably due to the great loss represented by the organization.
The United States Postal Service has reported extreme losses in recent years
In response to Trump's criticism, a USPS spokesperson stated that the agency has been implementing a modernization plan that has included the reduction of 45 million man-work hours over the past three years and a saving of $2 billion in transportation costs. However, the losses are still significant.
The proposal to privatize the postal service, although still under discussion, highlights the growing concern for the agency's financial sustainability in a context of falling volumes of traditional mail and increased competition in the package delivery sector.
The economic and social implications of privatizing the USPS are complex, and this proposal could generate a broad debate about the benefits and costs of privatization.
After the worrying financial reports, the government company announced that it made a significant reduction in working hours
