Special to the Las Vegas Tribune
The U.S. Postal Service (USPS) is the nation’s second largest civilian
employer after WalMart. Although successfully self-funded throughout
its long history, it is currently struggling to stay afloat. This is
not, as sometimes asserted, because it has been made obsolete by the
Internet. In fact the post office has gotten more business from
Internet orders than it has lost to electronic email. What has pushed
the USPS into insolvency is an oppressive 2006 congressional mandate
that it prefund healthcare for its workers 75 years into the future.
No other entity, public or private, has the burden of funding multiple
generations of employees who have not yet even been born.
The Carper-Coburn bill (S. 1486) is the subject of congressional
hearings this week. It threatens to make the situation worse, by
eliminating Saturday mail service and door-to-door delivery and laying
off more than 100,000 workers over several years.
The Postal Service Modernization Bills brought by Peter DeFazio and
Bernie Sanders, on the other hand, would allow the post office to
recapitalize itself by diversifying its range of services to meet
unmet public needs.
Needs that the post office might diversify into include (1) funding
the rebuilding of our crumbling national infrastructure; (2) servicing
the massive market of the “unbanked” and “underbanked” who lack access
to basic banking services; and (3) providing a safe place to save our
money, in the face of Wall Street’s new “bail in” policies for
confiscating depositor funds. All these needs could be met at a stroke
by some simple legislation authorizing the post office to revive the
banking services it efficiently performed in the past.
Funding Infrastructure Tax-free
In a July 2013 article titled “Delivering A National Infrastructure
Bank… through the Post Office,” Frederic V. Rolando, president of
the National Association of Letter Carriers, addressed the woeful
state of U.S. infrastructure. He noted that the idea of forming a
national infrastructure bank (NIB) has had bipartisan congressional
support over the past six years, with senators from both parties
introducing bills for such a bank:
An NIB would provide a means to channel public funds into regional and
national projects identified by political and community leaders across
the country to keep the economy healthy. It could issue bonds, back
public-private partnerships and guarantee long-term, low-interest
loans to states and investment groups willing to rebuild our schools,
hospitals, airports and energy grids. An NIB with $10 billion in
capital could leverage hundreds of billions in investments.
What has blocked these bills is opposition to using tax money for the
purpose. But Rolando asks:
[W]hat if we set up the NIB without using taxpayer funds? What if we
allowed Americans to open savings accounts in the nation’s post
offices and directed those funds into national infrastructure bonds
that would earn interest for depositors and fund job-creating projects
to replace and modernize our crumbling infrastructure?
A post office bank… would not offer commercial loans or mortgages.
But it could serve the unbanked and fund infrastructure projects
selected by a non-partisan NIB.
The Unbanked and Underbanked: A Massive Untapped Market
The “unbanked” are not a small segment of the population. In a 2011
survey, the unbanked and underbanked included about one in four
households. Without access to conventional financial services, people
turn to an expensive alternative banking market of bill-pay, prepaid
debit cards, check cashing services, and payday loans. They pay
excessive fees and are susceptible to high-cost predatory lenders.
Globally, postal banks are major contributors to financial inclusion.
Catering to this underserved population is a revenue-generator for the
post office while saving the underbanked large sums in fees.
Worldwide, according to the Universal Postal Union, 1 billion people
now use the postal sector for savings and deposit accounts, and more
than 1.5 billion take advantage of basic transactional services
through the post.