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Thousands Of U.S. Post Offices Lose Money. Should Some Be Closed?

NOEL KING, HOST:

There are more than 31,000 post offices in this country. They sell stamps and services. But in many places, especially in rural areas, that's just not enough to cover their costs. Here's NPR's Brian Naylor.

BRIAN NAYLOR, BYLINE: Some 42% of the nation's post offices were underwater in 2019, not generating enough revenue to cover their expenses, according to the Postal Service's inspector general. Half of those that didn't cover their costs are within five miles of another post office. So are there too many post offices?

PAUL STEIDLER: The short answer is no.

NAYLOR: That's Paul Steidler of the right-leaning Lexington Institute and who studies the U.S. Postal Service. He says the agency looked at this issue a decade ago.

STEIDLER: Patrick Donahoe, the postmaster general at the time, proposed closing 3,700 post offices, about 12% of the number that are in the country today. And frankly, there was a firestorm of bipartisan, intense congressional opposition to this.

NAYLOR: It's a bipartisan issue because the rural post offices tend to be in red state America. James O'Rourke is a professor at Notre Dame's Mendoza College of Business. He says the Postal Service settled for service cutbacks.

JAMES O'ROURKE: What they did was leave them open and reduce operating hours to about six hours, in some cases, four and even as few as two hours at some post offices.

NAYLOR: But the inspector general's report says the Postal Service hasn't taken any further steps to make more money at its retail operations but does have several options. There's a congressional subsidy for rural post offices, which the Postal Service has never used. And there are other services it could be providing, like selling hunting and fishing licenses, leasing part of their buildings or, O'Rourke says, getting into banking.

O'ROURKE: Access to safe and affordable financial services, I think, is vital, particularly among low-income families. It's something the Postal Service could do very easily. They've got the locations. They have clerks that are trained in accepting and managing money. And they have a focus on customer service.

NAYLOR: A group of Democrats in Congress has proposed just that, a pilot project to provide low-cost checking and savings accounts, ATMs, even small loans at post offices. Democratic Representative Alexandria Ocasio-Cortez of New York spoke at a Capitol Hill news conference.

(SOUNDBITE OF ARCHIVED RECORDING)

ALEXANDRIA OCASIO-CORTEZ: The Postal Service is awesome (laughter). We love the Postal Service. Americans love the Postal Service. They want to protect the Postal Service. They want to expand the Postal Service. And this bill does just that, raising over a billion dollars in revenue for our Postal Services so that our - from everyone from our babies to our seniors can continue to enjoy the services that they provide.

NAYLOR: It's not clear how much support the Democrats' plan has in Congress. Paul Steidler thinks it's ill-advised. And he says post offices have a value beyond their profit margins.

STEIDLER: Postal Services, especially in rural areas, tend to be a part of the town's identity, a part of the town's history. Many of them are, you know, 100-plus years old, have very iconic and beautiful architecture. So there's a value there beyond, you know, how much they make or don't make.

NAYLOR: And mail carriers go the last mile for some major shippers, along with delivering prescriptions and serving as a lifeline in rural areas. In response to the inspector general's report, the Postal Service says current law forbids it from closing small post offices just because they're operating at a deficit. Although, the agency's recently released 10-year plan stated it might propose consolidating a small number of post office branches in urban areas.

Brian Naylor, NPR News. Transcript provided by NPR, Copyright NPR.