The USPS is still in big trouble under Biden
Celebrities tweeted about it, politicians campaigned on it, friends on Instagram posted about it, and some even wore it on T-shirts. It was the rallying cry of late 2020: #SaveThePostOffice.
But as the initial chaos surrounding the presidential election begins to dissipate, President Donald Trump’s election-fraud lawsuits get thrown out of court, and President-elect Joe Biden’s transition team takes over the news cycle, that public fervor for the United States Postal Service has fallen to the wayside.
It makes sense. Biden, who raised campaign dollars on his plan to keep the post office from privatizing and to supply it with adequate funding, will soon be in power.
The problem, in many American eyes, is solved. Mission accomplished, right?
“I see the comments on news stories about the USPS,” said Mark Dimondstein, president of the American Postal Workers Union. “They’re all exploding with misinformation. The public thinks that the postmaster general [Louis DeJoy] is going to go away when Trump does because they’re so closely linked.”
But, said Dimondstein, “the common wisdom is wrong.”
In reality, Biden does not get to nominate or fire the postmaster general—that’s up to the USPS Board of Governors, the majority of whom are Republican.
It’s easy to understand the confusion because the inner workings of the Postal Service are just that: confusing.
It’s a semi-governmental agency that runs like a business but functions like a public service. It’s politicized but supposed to be apolitical, and there have been a number of large restructurings of the post office in the past 50 years. Until 1970, postmaster general was a cabinet position, nominated by the President, but the power shifted away from the White House in Nixon’s Postal Reorganization Act as an attempt to depoliticize the job.
And so DeJoy, who has told Congress that he would like to privatize parts of the USPS and who made changes with the intent to slow mail delivery, will remain at the helm of the post office for the foreseeable future.
Ahead of the election, DeJoy instituted changes to eliminate overtime distribution and sorting, resulting in unprecedented slowdowns of mail and package delivery.
Data obtained by the American Postal Workers Union, which represents about 200,000 postal workers, shows that nearly 20% of all work by mail handlers, city carriers, and postal drivers is done in overtime. There were no plans to hire more employees to make up for the cut in hours. After significant public and political pressure, DeJoy said that he would suspend the slowdown until after the election but not permanently.
Without the attention that was heaped upon the USPS in the lead-up to the election, union officials worry that he’ll be able to make changes one again, but this time they’ll fly under the radar.
“The post office has to have enough staff and hire enough workers to serve the people. If you don’t have enough people and hours of work to make sure that there is prompt service, that puts us into a downward spiral,” said Dimondstein.
It’s not just slowdowns. A lack of business-class mail and the quarantine of thousands of postal workers because of COVID-19 have led to a significant loss in revenue for the already ailing postal service. In the fourth quarter, USPS reported that it had lost $9 billion for the full year, despite an increase in package volume. Sales were up $73.1 billion from $71.1 billion in 2019, but first-class mail and marketing mail sales fell to $37.7 billion from $40.8 billion last year.
The gap between revenue and reported losses was also the result of expenses that the U.S. government imposes on the postal service and which other businesses don’t face, like the pre-funding of retiree health care pensions well into the future.
The law, passed in 2006 with the support of the George W. Bush administration, required USPS to pre-fund employee retiree health benefits years into the future. Typically, companies that pay pensions do so as the cost arises and aren’t required to set aside money in advance. No other federal agency bears this burden, and critics call the law “draconian,” claiming that it was created with the intention of leading the postal service toward privatization. Pension funding accounted for an estimated 80% to 90% of the agency’s losses before the pandemic, said officials.
Still, DeJoy blamed the postal service’s business model for the loss and called for future cuts. “The postal service has had a systemic imbalance between revenues and costs for more than a decade,” he said.
Dimondstein does see a way forward without future cuts or privatization, but it’s a slow way forward and requires the postal service to retain the political capital and popularity it currently enjoys.
Congress could overturn the parts of the 2006 Postal Accountability and Enhancement Act that require the pre-funding of pensions.
Earlier this year, Congress passed a bill that did just that along relatively bipartisan lines, but it got stuck in the Republican-controlled Senate. As this session of Congress comes to an end, so does the un-passed bill. But Diamondstein has hope that it will be reintroduced next year and the Senate will be more agreeable this time around.
And while Biden is unable to pick a postmaster general, he does get to appoint the nine governors who serve on the board of the USPS for seven-year terms. There are currently only five members serving, which means that Biden can nominate four new governors right away. The remaining five members will see their terms expire over the course of his administration, freeing up more room for his nominees. Those serving on the board are permitted to select a new postmaster general.
The postal service is also still holding out hope that Congress will include emergency funding for the agency in its next stimulus package. It’s asking for $25 billion.
Previously, DeJoy agreed to take a $10 billion loan from the U.S. Treasury in lieu of a bailout. In exchange for the loan, the postal service agreed to hand over proprietary information about 10 of its most lucrative contracts with third-party shippers like Amazon, FedEx, and UPS. The postal service works with these shippers to deliver “last mile” deliveries, sometimes at slightly discounted rates, a practice that Trump has long derided, especially when it pertains to Amazon.
The loan also requires the USPS to deliver the Treasury with monthly and quarterly financial and volume reports. The Treasury has also attempted to use the loan negotiations to gain control of personnel decisions, third-party contract approvals, package prices, and union negotiation strategies but eventually settled for receiving proprietary information.
It is unlikely that Janet Yellen’s Treasury will attach these caveats to any future loans.
The USPS is the most well-liked government agency in the country, according to Pew, with a 91% favorability rating. Another poll found that 92% of American voters said they supported direct financial aid for USPS as part of the next coronavirus relief bill.
The USPS is the only universal provider of mail service and has been a low-cost anchor for the mailing industry, helping to keep private mail service rates down. A recent analysis by the Institute for Policy Studies found that without the USPS, 70 million more Americans would have to pay hefty surcharges for deliveries.
“Look, I wish Congress had dealt with this head-on last March when they had the opportunity to, but instead the can got kicked down the road,” said Dimondstein. “We’re certainly concerned. We don’t want the public to take their eye off the prize, and we’re going to continue to try to be as public and loud as we can in our views so that they don’t.”