As his campaign moves forward, former Vice President Joe Biden’s platform is coming into focus.  The first indication of the direction in which he will be going is the “Biden-Sanders Unity Task Force,” released on July 8.  It is a 110-page radical Far-Left manifesto that belies any claim or perception that he is a “moderate” candidate. 

In addition to Sen. Sanders (I-Vt.), who included word-for-word many of his campaign’s recommendations, the task force includes avowed socialist Rep. Alexandria Ocasio-Cortez (D-N.Y.) and Rep. Pramila Jayapal (D-Wash.), a member of “The Squad,” who each co-chair two of the 12 sets of proposals.

While Sen. Elizabeth Warren (D-Mass.) was not included as one of the authors, some of her worst ideas have been added to the recommendations, including postal banking.

Over the past 14 years, the United States Postal Service (USPS) has lost $78.5 billion and now has $143 billion in unfunded liabilities. No one should be inspired enough by that performance to allow the agency to handle anyone’s money. 

The idea of postal banking has been rejected in several reports and comments from federal agencies, including the USPS itself.  The Department of the Treasury Task Force on the United States Postal System concluded in its December 2018 report that an agency with limited capital and expertise should not expand into any new business, including banking, where it lacks competence or where there could be financial risk.  After the USPS inspector general suggested in January 2014 that the agency could provide financial services, the USPS released a statement that noted its “core function is delivery, not banking.”  The Government Accountability Office (GAO) has said the USPS has a “broken business model” and the agency has repeatedly been included in GAO’s High-Risk List.  GAO’s 85-page May 2020 report, “Congressional Action is Essential to Enable a Sustainable Business Model,” did not include a recommendation to expand the USPS into postal banking.

Postal banking would undermine the basic mission of the USPS, undercut financial institutions that are well-regulated, and hurt taxpayers and consumers.  The agency’s financial and service problems make it clear that it would be incapable of handling money better than a competitive and efficient private sector industry.  And if the USPS is not held to the same financial standards as banks, lending by the agency could be politicized, and credit standards could be weakened.

The Biden-Sanders task force recommendation is part of the campaign’s larger effort to expand the power of all government agencies.  Once the USPS gets into banking, it will likely seek more expansive powers.  

One of the most frequently used argument by proponents of postal banking is that it would help the “underserved” market.  The 6.5% of U.S. households that are underbanked or unbanked do not lack  access to banking institutions, since there are tens of thousands of private sector entities that have the ability and competence to reach all Americans.  And the number and scope of those institutions disprove the idea that the USPS can provide greater geographical reach.  There are  31,324 USPS branches, or one-third of the 88,646 retail bank branches, and less than one-tenth of the 475,000 ATMs nationally.  These retail bank branches and ATMs provide the same services as would a postal bank, and many of them are in low-income areas to provide service for the so-called underserved.

Fixing the USPS’s longstanding structural problems require modernizing its broken business model, not advocating for it to enter into other business sectors outside its core competency.  Giving a failing federal institution wider latitude to infringe on the private market for financial services is one of many bad ideas in the Biden-Sanders Unity Task Force, or perhaps more accurately, mind-numbingly stupid.