Post Office Banks? Why Not?

When I was a boy in Jamaica, I used to get a blank sheet at the Post Office and fill it up one by one whenever I had a penny to spare to buy a stamp. When the sheet was full, I turned it in at the post office and had the total amount of the stamps added to my little deposit book. It was the way we children saved for expenses like Christmas and birthday presents.

I don’t know if they still have that in Jamaica, but I think it’s a wonderful idea.

Of course Republicans like Congressman Darrell Issa are appalled at such proletarian ideas. The chairman of the House Oversight Committee, which oversees the Postal Service, dismissed a proposal to allow US post offices to provide banking services. He called the suggestion “unacceptable” and a “massive expansion” of government power.”

What got the congressman’s shorts in a knot? The competition that the existing banking system would face, of course. As I’m sure you know, the Republican Party is dedicated to protecting the privileges of bankers and other elite special interests. And they can count on generous campaign contributions in return.

Issa complained that:

The Postal Service pays no federal, state, or local taxes, is exempt from most state and local laws, and is implicitly backed by the taxpayer in the event of bankruptcy. With these inherent advantages over the private sector, allowing USPS to expand into broad new arenas, such as the financial service industry, would be unacceptable and represent a massive expansion of the power of government.

Issa was responding to a proposal from the Postal Service’s inspector general that included offering a range of financial services.

The post office is lumbered with an unfair system that forces it to put up millions in advance on its employee pension plan.  Making that system more reasonable would probably be enough to stem the current flow of red ink.

But the last thing Issa and his ilk want is to keep the post office viable. They want to privatize mail services – another hand-out to their millionaire buddies.

You can see why they would object to any plan – however sensible – to get the mail service in the black.

Despite fierce opposition by Issa and his pals in the banking community, however, the proposal refuses to go away. An article in this morning reports that Vicki Kennedy (photo above), a nominee for an existing vacancy on the Postal Service Board of Governors, made this comment during recent nomination hearings:

I think it … important to look at the possibility of expanding into related business lines.

The article notes that Mrs. Kennedy (Ted’s widow) is a Democratic nominee, and adds that with existing vacancies on the board of governors, the President has an opportunity to reverse the Republican majority. At least one other Democratic nominee also expressed positive interest in the inspector general’s proposal.

The article also cites studies that indicate strong public support for the idea. And with a network of 35,000 locations throughout America, post office banking would be especially welcome in rural America, the article added.

The idea certainly seems worth considering but I doubt such reforms are possible as long as Issa and his Republican colleagues control the House of Representatives. The fist step to any progress in America is kicking them out in November.

Then, Congress can seriously consider ways of making the Post Office profitable. Freeing the service from its onerous pension obligations should be a top priority. And the banking idea should also get serious consideration.

Click for the article.

Click for more on the post office’s problems.