How the U.S. Postal Service Fell Apart

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Chuck Berman / Chicago Tribune / MCT / Getty Images

The post office in Millington, Ill., pop. 665, is one of many small-town post offices slated to close as a result of the U.S. Postal Service's financial problems

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A few years later in New York City, a wildcat strike (one in which workers defy their union leadership) broke out, primarily over low wages. TIME called it "the Strike that Stunned the Country." At the time, postal workers were making less than sanitation workers, according to Philip Rubio, an assistant professor of history at North Carolina Agricultural and Technical State University. "A postal worker with a family of four could qualify for food stamps," he said.

When the workers walked out, President Richard Nixon sent in National Guard and U.S. Army troops to try to sort the mail. But it didn't help. "They rapidly realized what a failure that was," Rubio said. "They just couldn't get up to speed, and the mail kept stacking up. Within eight days, the Nixon Administration signaled it was willing to negotiate."

These incidents led to the Kappel Commission, a presidential advisory group made up of corporate leaders who had, admittedly, little knowledge about mail-delivery operations. By 1970, they were at work on proposals to reform the postal service, which eventually became the Postal Reorganization Act, turning the U.S. Post Office Department into the U.S. Postal Service. It was more than just a name change. Congress essentially turned the postal service into a quasi-governmental organization — not really a business but not really part of the government either. It was being forced to run more like a corporation or a private entity, to be self-supporting, even as it was still tasked to maintain service to every home in the country.

For the next several decades, the USPS was successful by most measures, surviving the occasional disgruntled worker's becoming violent — incidents that brought the phrase going postal into our consciousness. And, of course, there were some perennially angry customers fed up with long lines at the post office. But in general, the USPS was doing well enough that Congress decided it should start prefunding its retiree accounts — for the next 75 years. So in 2006, Congress passed a law requiring an annual prepayment of retiree health benefits, to the tune of $5.5 billion a year for 10 years. Except Washington didn't see the recession coming two years later. "That act has left such a devastating legacy that it threatens to drive our nation's postal service off the rails," Rubio said.

Penny-Wise and Pound Foolish?
Enter Patrick Donahoe, the 55-year-old Pennsylvanian who became the nation's 73rd postmaster general in October of last year, perhaps the rockiest time in the history of the place. Donahoe has worked at the postal service for 36 years, first as a clerk in his hometown of Pittsburgh. He eventually worked his way up to the office that Pennsylvania's Benjamin Franklin once held, postmaster general. "I'm an antique," Donahoe jokes.

Speaking to TIME, Donahoe calmly laid out his plans to fix the USPS's predicament: reducing costs by $20 billion through 2014, pushing Congress to approve five-day rather than six-day delivery, laying off tens of thousands of workers. Listening to his sleepy Pennsylvania accent, one could easily forget that he's talking about gutting and radically transforming an American institution.

The Obama Administration recently extended the deadline for the post office to make its next $5.5 billion retiree payment. That deadline is Nov. 18. But even that isn't enough — even without making that payment, the USPS lost $5.1 billion in the fiscal year ending in September.

And that's where the post-office closings come in. Thousands of them. So far, it has placed 3,650 post offices on a review list for possible closure, but that's not the end of it. Donahoe says that the number could be much higher.

"We'll probably look at 15,000 post offices rather than just 3,700," Donahoe says. "Not to say that anything is guaranteed to close, but if you're spending $70,000 to operate a place that's bringing in $10,000, there have to be some other solutions."

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