The United States Post Office has become a point of political contention, especially over recent weeks. So, what gives? Here’s a short explainer on the history and news that got us where we are today.

What it does: The USPS is responsible for delivering 554 million pieces of mail every day, including to Guam, Puerto Rico, American Samoa, and The Virgin Islands. (This makes it a little more understandable that one of my wedding invitations got lost in the mail.)

The service has more than 40,000 post offices and 500,000 employees. Deliveries include life-saving medications, paychecks, social security checks, and other crucial items for Americans at low cost. In rural areas, the post office delivers plants, farm equipment, and even animals

Fun facts: In 1913, the USPS began accepting packages over their previous four-pound weight limit. The result? Some parents reportedly sent their babies and small children to grandparents via USPS until this practice was squashed in 1915. 

There’s one place where mail is still delivered by mule! It’s in The Grand Canyon

USPS history: then and now

Back in 1775, when we were still the thirteen colonies, Benjamin Franklin became the first postmaster general. He was in charge of streamlining mail and developing routes for mail carriers. Later, George Washington and James Madison helped pass The Post Office Act of 1792, which allowed newspapers to be delivered through the mail, and barred the government from reading people’s letters. Those two innovations were wildly hailed as empowering facets of our new democracy. 

Fast forward to 1970. Postal workers went on strike to protest low wages. It was reportedly the largest-ever protest of federal employees. Then-President Richard Nixon didn’t take kindly to the strike, and responded by restructuring the USPS so it would pay for itself, rather than depend on federal funding. Since this change, the idea of privatizing the USPS has been a sticking point for many conservative politicians. 

Fast forward again to the start of the 21st Century. The Post Office loses money every year – between $600 million and $3 billion, depending on the year. In 2006, the USPS incurred further losses when Congress enacted The Postal Accountability and Enhancement Act, which charged the USPS $5.5 billion every year for ten years to fund future pensions for USPS workers when they retire. 

Then, we had the recession of 2008, which hit the entire economy—USPS included. Between the billions it owed through the Postal Accountability and Enhancement Act, the recession, and the fact that it was barred from using taxpayer dollars to help bail it out, the USPS has been billions in debt almost every year.  

And that brings us to 2020: Covid-19 has hurt nearly every business and the civil service. The USPS has more than $200 billion of debt and liabilities, and it lost $2.2 billion in the first three months of the pandemic alone. The CARES Act, passed in March to help the country stay afloat, allocated $25 billion for the USPS. But President Trump blocked this funding, and the USPS still hasn’t received it. 

On June 15, a new Postmaster General named Louis DeJoy was sworn into office. DeJoy is a Trump donor and businessman who has a multi-million dollar stake in XPO Logistics, a company that has contracts with the USPS. This could be considered a major conflict of interest, since DeJoy now has the option to structure the USPS in a way that could keep costs low for XPO, thus potentially earning him more money. Since taking office, DeJoy has cut overtime pay, removed mail sorting machines, and eliminated some USPS jobs, all of which have reportedly slowed mail delivery.

And then there’s Amazon. The USPS delivers 30 percent of Amazon packages, often to the most rural, hard-to-get-to areas. Trump has long-criticized this partnership for being a burden on the USPS, and has generally waged a war against Amazon, its CEO Jeff Bezos, and Bezos’s newspaper The Washington Post, which is often critical of the president. By appointing an ally to lead the post office, Trump has begun to strip it of its ability to deliver critical packages, thus shooting Bezos’s company in the foot. 

And it’s not just Amazon. Companies including Fedex and UPS rely on the USPS for so-called last-mile deliveries to places where they don’t have offices or drivers.

Meanwhile, President Trump has also complained that many states may allow more people to vote by mail this November due to Covid-19. Trump has said that mail-in ballots will result in fraud, though there is reportedly no evidence to support this. As the USPS pleads for more resources to handle a potential surge of mail-in ballots, Trump has called the USPS a “joke” and even said outright that he’ll block financial aid to the USPS to increase the difficulty of mail-in voting

Now, the USPS says it will run out of money by 2021 if it doesn’t receive federal aid

What this means for you: The USPS is a critical part of  our economic infrastructure, enabling important deliveries of mail, medicines, materials, and other necessities that consumers and businesses alike rely on. If the USPS doesn’t get funding, services could be curtailed, and we might have to rely on private, for-profit companies for deliveries, which could increase prices.

Additionally, if you plan to vote by mail for the upcoming presidential election, this USPS debacle means you need to request your mail-in ballots as soon as possible and return them as early as you can. If the USPS gets flooded with ballots and doesn’t have the resources to sort and deliver them, your vote may not be counted on time

Welcome to your new financial home.

Start today with any dollar amount.

Get the App

Hooked on Stash? Tell your friends!

Get $5 for every friend you refer to Stash.

Refer friends

Hooked on Stash? Tell your friends!

Get $5 for every friend you refer to Stash.

Refer friends