The current standoff between President Donald Trump and Congress over the U.S. Postal Service is rekindling a long-standing debate over how to overhaul an agency delivering more packages from online shoppers, but not enough letters to overcome a mounting revenue decline and growing retirement costs.
Bipartisan calls from lawmakers to cut a big check for the service — as much as $25 billion — are playing out as a Trump ally now serving as postmaster general makes big changes to its leadership.
Trump, who has referred to the Postal Service as Amazon’s “delivery boy,” said Thursday he wants to starve the agency of more funding to prevent people from voting by mail. Those comments escalated the demands for funds to increase election security, even as prospects for deal on a broader coronavirus relief package are murky.
Letters from Postal Service leaders recently sent to election officials in most states warned that ballots cast by mail might not be delivered in time to be counted by Election Day.
And Maine Republican Sen. Susan Collins sent a letter Thursday to U.S. Postmaster General Louis DeJoy warning that recent changes and reported service issues could harm constituents and “ultimately harm its long-term financial viability.” She also told Portland CBS affiliate WGME she disagreed “very strongly” with Trump on his comments, saying the service was “absolutely essential.”
A Wednesday letter signed by all Senate Democrats called on DeJoy to provide a more thorough accounting of what is being done under his leadership to long-standing practices at the Postal Service. The letter demanded answers on reports of increased delivery times and costs for election mail, and urged him to avoid further steps that would make it harder and more expensive for states to mail ballots.
“Since you assumed the role of Postmaster General, there have been disturbing reports regarding changes at USPS that are causing significant delays in the delivery of mail,” the letter read. “Under normal circumstances, delayed mail is a major problem — during a pandemic in the middle of a presidential election, it is catastrophic.”
Democrats have criticized DeJoy’s moves to reorganize leadership and reduce costs related to overtime and transportation amid the pandemic. The agency gets no tax dollars for operating expenses and funds operations through sales. It has also struggled to fulfill a congressional requirement to annually prepay future retirement costs, which some say have contributed to its recent inability to turn a profit.
In a letter sent earlier this month to DeJoy, Senate Minority Leader Charles E. Schumer and Speaker Nancy Pelosi said the changes were “unacceptable and counterproductive and must be reversed.” They also requested more documentation of changes made, and more information about possible impacts of operational changes on mail delivery and how the Postal Service plans to safely and securely deliver 2020 election mail.
House Oversight and Reform Chairwoman Carolyn B. Maloney has also called on DeJoy to appear before her committee for a September hearing on the operation changes.
Normal change, unusual times?
Michael Plunkett, who spent over 25-years at the Postal Service and is now president of PostCom, a nonprofit association of businesses reliant on shipping packages and mail, said it was expected DeJoy would do some level of reorganization.
“I think if the previous [postmaster general] had done the exact same thing a year ago, it would not have even been a story,” he said.
In a letter sent Thursday to Postal Service employees and provided to CQ Roll Call, DeJoy said the changes being made to improve its “dire” financial condition “will not be easy, but are necessary.” The Postal Service Board of Governors confirmed DeJoy to his post earlier this year and he started in June.
By implementing changes now, the service “will increase our performance for the election and upcoming peak season and maintain the high level of public trust we have earned for dedication and commitment to our customers throughout our history,” his letter said.
DeJoy asserted that the Postal Service has been able to move more mail on time and on schedule since he took the helm. “And, we accomplished this in a cost-effective manner,” he said.
But DeJoy’s letter conceded that some of these initiatives have had “unintended consequences that impacted our overall service levels.”
Data on mail delivery in April, May and June, which came out last week, found that service numbers were already down from the same quarter last year, but it was only after the reorganizations that rumblings about mail delays have gotten louder.
For April through June of this year, first-class mail was 90.82 percent on time, marketing mail was 89.50 percent on time and periodicals were 76.91 percent on time. That’s down from the same period in 2019 when first-class mail was 93.38 percent on time, marketing mail was 91.13 percent on time and periodicals mail was 87.86 percent on time.
“Even before the pandemic, there were many stories of mail being late. During the pandemic, there were more of them,” said Stephen Kearney, who spent over three decades at Postal Service headquarters, and is now executive director of the nonpartisan Alliance of Nonprofit Mailers.
His organization has acknowledged that changes are likely needed at the service, but it criticized the agency in a recent report for what it said was “a poor job of communicating its cost-cutting initiatives to rate-paying customers, the mailing industry, Congress, the media, and the general public.”
Media coverage has focused on anecdotal stories of delays in mail delivery and equipment being removed from facilities, but data on whether delays are really up between July and September won’t be available until later this year.
On Aug. 8, Sen. Steve Daines, R-Mont., sent a letter expressing concerns that some of the changes, especially one concerning the holding of late mail until the next day, will “negatively impact mail delivery for Montanans and unacceptably increase the risk of late prescriptions, commercial products or bill delivery.”
Montana’s other senator, Democrat Jon Tester, in a Friday statement cited reports that Postal Service collections boxes may have been removed from several towns in his state and demanded answers on DeJoy’s plans for the state. Later in the day, he said the service had paused its removal of the mail collection boxes.
For years, people have suggested that because there isn’t agreement on how to overhaul the Postal Service, the funding for such change will only be revisited when there’s a crisis, Kearney said.
The agency, which had operating revenues of $71.1 billion for fiscal 2019, reported a 3.2 percent, or $547 million, increase in the third quarter of fiscal 2020 compared to the same period the previous year. But even so, the Postal Service still posted a net loss of $2.2 billion for the quarter.
The service’s package revenues continue to grow, especially as e-commerce has exploded as Americans hunker down. But the package and shipping division been a rare bright spot for the agency struggling under major losses in its letter mail volume.
“Shipping and Packages revenue increased by $2.9 billion, or 53.6 percent, on a volume increase of 708 million pieces, or 49.9 percent, compared to the same quarter last year,” the agency’s fiscal 2020 third-quarter report released in August noted.
Kearney said one alternative to a large one-time appropriation (as proposed in the most recent House-passed coronavirus aid package) would be to define and fund the Post Service’s “Universal Service Obligation,” leaving the remaining business to be self-sufficient. The agency defines the USO as a “collection of requirements that ensure all users receive a minimum level of service at a reasonable price.”
“You need to clearly define what the public service obligation is at the Postal Service and then you can measure how much that costs,” he said. “Then you can appropriate the money to cover it.”
Recent attempts at getting bipartisan bills through the House and Senate have stalled, without becoming law.
A report published in May by the Postal Service inspector general examining the USO concluded that it is still not clearly defined, and “a further defined USO would protect postal customers while providing guidance to the Postal Service about what changes it can implement.”
Senators from rural areas weren’t satisfied with a deal announced in late July between the Treasury Department and the Postal Service that would allow the mail service to tap into a $10 billion loan, which was included in March’s approximately $2 trillion coronavirus aid package.
The more than $3 trillion House-passed package approved in May contains $3.6 billion for election assistance, but members of both parties have expressed support for providing the agency with $25 billion more.
Maine’s Collins introduced legislation with bipartisan support in July that would provide the Postal Service with $25 billion. She more recently submitted an amendment to a legislative vehicle for coronavirus aid brought to the Senate floor.
Sen. Joe Manchin III, D-W.Va., expressed concern in a July letter to the postmaster general over potential branch closures and emphasized the importance of mail service to rural Americans, especially those who rely on prescriptions and other essential goods delivered to their doorsteps.
In a July 31 response to Manchin, DeJoy said the closure notices placed at 12 post office locations were done prematurely because a feasibility study had not yet been conducted. But DeJoy said the study would still go forward. He also said the notices placed at 24 locations set to have reduced hours was done prematurely, and signage had been removed “pending further review.”
“While I am relieved to hear that these locations will not be closing at the end of August, I have more questions now than before I got this response,” Manchin said in a July 31 statement.
On Friday, Manchin visited post offices in West Virginia as a show of support, saying in statement, “The Administration is launching an all-out war on the U.S. Postal Service.”
When the Treasury Department announced terms of the $10 billion loan, DeJoy said in a statement it “will delay the approaching liquidity crisis.” He added that the service is on an “unsustainable path” and will continue focusing on “operational efficiency and pursuing other reform.”
It is unclear how the loan will be used. Postal Service spokesman Dave Partenheimer told CQ Roll Call on Thursday the agency did not have the loan money or updates on how the money would be spent.
As the fall election heats up, presumptive Democratic presidential nominee Joe Biden stepped into the debate Monday amid reports that veterans’ prescriptions were being delayed — sometimes by weeks.
“President Trump keeps attacking the U.S. Postal Service, and now hundreds of thousands of veterans aren’t getting their life-saving medications on time. It’s despicable,” he tweeted. “I promise you that as president, I will never put politics over the care of our nation’s veterans.”
And, despite Trump’s contention that mail-in voting is rife with fraud and an avenue for his opponents’ victories, the president and first lady this week asked election officials in their official home in Palm Beach County, Florida, for mail-in ballots for next week’s primary elections.