Postal Service’s financial stress might hurt its ability to handle large volume of mail-in ballots

As the coronavirus pandemic forces adjustments in 2020 races, some states worry that financial disruptions at the U.S. Postal Service may lead to decreased voter turnout in the general election. 

More than a dozen states are already preparing for the November election, with the anticipation that more voters will choose mail-in ballots over in-person voting. If the USPS continues to endure financial stress, there are concerns that it may not be able to effectively carry out the expected onslaught of mail-in ballots for the election.

“The Office of the Secretary of State has become increasingly concerned about the declining revenue of the United States Postal Service,” said Kylee Zabel, communications director at the Washington state election agency. “If the USPS diminishes, or interruptions in mail service occur, every single state will have to mitigate the impacts to their by-mail voters.” Washington state is one of five that conduct voting entirely by mail.

Hawaii, which also conducts all-mail voting, worries that the pandemic might “affect our timeline in mailing and receiving ballots,” said Nedielyn Bueno, head of voter services in the state’s Office of Elections. “We are in contact with our local USPS representatives and our federal partners to stay informed of any shift in postal service.”

Other states told CNBC they regularly touch base with their local USPS offices for updates. 

“We are continuing to follow that situation and will address any issues with mail service as it regards elections, should they arise,” said Kristen Muszynski, director of communications at the Maine Department of the Secretary of State.

In Rhode Island, the Board of Election is “in regular contact” with the local postmaster, informing the office of “large mailings,” according to deputy director of elections Miguel Nunez.

“We have also requested that [they] make us aware of any local service interruptions that could potentially delay the return of ballots to us from voters,” Nunez told CNBC.

The USPS, in a statement, emphasized its partnerships at the local, county and state levels.

“As we anticipate that many voters may choose to use the mail to participate in the upcoming elections due to the impacts of the COVID-19 pandemic, we are conducting and will continue to proactively conduct outreach with state and local election officials and Secretaries of State so that they can make informed decisions and educate the public about what they can expect when using the mail to vote,” said USPS public relations manager David Partenheimer.

The USPS has not had a profit since 2006, according to a 2014 report on the agency’s finances. Between then and March 2020, the USPS reported more than $83 billion in losses. 

One big reason for its shortfall has been the requirement that the USPS prefund health benefits for its workers, a 2018 CNBC analysis said. Other employee-related expenses, such as worker benefits, fluctuate from year to year based on “changes in actuarial assumptions, such as interest and inflation rates, and employee and retiree demographics,” as the USPS said in its 2019 annual report.

The coronavirus has exacerbated the Postal Service’s financial strain.

When the pandemic hit, mail volume fell by nearly a third, Postmaster General Megan Brennan said, because distressed businesses cut back on sending advertisements or catalogs. 

Some lawmakers have pushed for a bailout or additional funding in the next coronavirus stimulus package. Senate Republicans, however, are skeptical that the USPS needs congressional aid, The Washington Post reported.

Under the $2 trillion coronavirus stimulus package passed in March, Congress authorized the Treasury Department to give a $10 billion loan to the USPS. But President Donald Trump in late April threatened to withhold that loan unless the USPS raised rates for internet companies like Amazon, which Trump says is responsible for the collapsing USPS. 

Overwhelmed by the strain from the pandemic, the government-run postal service in April predicted it would run out of money by September. Brennan, speaking to members of the House Oversight and Reform Committee, said the USPS is positioned to lose $13 billion because of the pandemic and more than $54 billion over the next decade. 

The issue has caught the attention of prominent Democrats, including Sens. Bernie Sanders and Elizabeth Warren, who have urged Congress to allocate money to the Postal Service in the next round of stimulus relief. 

“Without relief or intervention, the United States Postal Service will not be able to sustain itself for the long term, which means it will not be able to deliver mail and packages to 160 million addresses all over the country,” Sanders wrote in an email to supporters last month.

The financial strain “could affect its ability to meet payroll, purchase gasoline, maintain vehicles and provide reliable service,” said James O’Rourke, professor of management at the University of Notre Dame.

These are factors that some experts say could also lead to a decline in voter turnout in the general election as more states begin to rally around mail-in ballots.

Several states have begun planning for and expanding vote-by-mail measures to decrease the risk of spreading the coronavirus.

Earlier this month, California Gov. Gavin Newsom signed an executive order allowing all registered voters in the state to receive a mail-in ballot for November’s election. And on Tuesday, Michigan Secretary of State Jocelyn Benson said every registered voter will receive an application for an absentee ballot for the general election.

Connecticut is also mailing out absentee ballot applications, including postage-paid return. “This plan will allow a larger number of voters to vote by absentee ballot than ever before, and do it at no cost to the towns or the voters,” the office of Secretary of State Denise Merrill said.

The District of Columbia and 34 states, including five that conduct all-mail voting, use no-excuse absentee voting, according to the bipartisan National Conference of State Legislatures. 

But Americans should not worry about missing mail, even with the added challenges brought on by the pandemic, the USPS said.

“The Postal Service has continued and will continue to serve its customers during the COVID-19 pandemic through the delivery of not only Election Mail, but also medicine, essential consumer staples, benefits checks, and important information,” USPS spokesperson Partenheimer told CNBC. 

At the same time, the USPS “recommends that election officials use First-Class Mail when mailing election materials (including blank ballots) to voters, and that voters mail their completed ballots at least 1 week before the due date to account for any unforeseen events or weather issues.”

But the concern that some Americans might not get to cast a ballot this November still exists. 

Rural communities might have the highest risk of low voter turnout, according to Betsy Huber, president of the National Grange, a nonprofit that advocates for support and equality for rural parts of the country.

Unlike other mail services, the USPS delivers to every ZIP code in the United States, a press release from the National Grange said, “leveling the playing field” for people in rural homes who often rely on their mail for connection.

“Sending mail in rural areas is more difficult than urban areas where there are multiple mailboxes readily available to deposit mail,” Huber told CNBC.

As a result, it’s generally not worth it financially for private companies like FedEx and the United Parcel Service to deliver to many of these homes. “Sparser population means more travel distance between delivery points, and between the warehouse and homes. Private companies can utilize the USPS for cheaper delivery than they could do themselves,” Huber noted. 

The USPS might be able to save some money by closing small or little-used post offices and eliminate Saturday deliveries, Notre Dame’s O’Rourke said, but a move like this is likely to affect those voters living in rural areas. 

There is evidence to suggest that people who vote by mail tend to be “older, housebound, live in rural areas, or do not have access to transportation permitting them to vote at a polling station in person,” O’Rourke said. These factors make them particularly vulnerable to forgoing in-person voting, especially now with the additional threat of contracting the coronavirus looming over them.

At the same time, a damaged USPS system can also lead to difficulty for candidates to get out their names, according to Jacob Neiheisel, associate professor of political science at the University at Buffalo. 

“Candidates for public office still rely heavily on campaign mailers as a key part of their get-out-the-vote efforts,” Neiheisel said. “Get-out-the-vote efforts are positively correlated with voter turnout, and without the ability to get their message out or remind voters to turn in their ballots, many campaigns are going to be rendered less effective than they might otherwise have been in the event that the USPS experiences delays or service outages.”

For candidates running for local offices, cost is a major factor when it comes to advertising their campaigns, so television ads, for example, “may make less sense or be cost-prohibitive for them,” Neiheisel said.

But even if candidates get their message out successfully using the mail, voters might see a delay down the line when it comes to receiving their ballots.

“Unreliable, interrupted mail service would cause additional delays and possibly disenfranchise voters whose ballots are delayed in any part of the process,” the National Grange’s Huber said.