The Postal Service, arguably one of the most beloved federal agencies, has been on the brink of insolvency for years, largely because of a 2006 law that requires the agency to fund retiree health care benefits for its employees in advance.
After numerous attempts over many years to repeal this cynical attempt to cause the Postal Service to fail in order to privatize it, Congress has finally relented, giving the Postal Service a new chance at financial solvency.
The New York Times reports, Congress Approves Legislation to Return the Postal Service to Solvency:
Congress gave final approval on Tuesday to the most sprawling overhaul of the Postal Service in nearly two decades, sending President Biden legislation intended to return the beleaguered agency to solvency and address pandemic-era mail delays.
The legislation removes the retirement mandate and instead requires retired Postal Service employees to enroll in Medicare when they are eligible, a change that lawmakers and agency officials estimated would save $50 billion over a decade.
The Senate voted 79 to 19 to approve the measure, which passed the House last month with overwhelming bipartisan support. Mr. Biden was expected to sign the bill, which the agency’s leadership and an array of interest groups support.
“The post office usually delivers for us, but today we’re going to deliver for them,” said Senator Chuck Schumer of New York, the majority leader. “For the past few months, Democrats and Republicans have been working together in good faith to reform some of the most troubled parts of the Postal Service.”
“With the legislative financial reforms achieved today, combined with our own self-led operational reforms, we will be able to self-fund our operations and continue to deliver to 161 million addresses six days per week for many decades to come,” Louis DeJoy, the postmaster general, said in a statement.
In 2020, a slowdown of mail delivery and a series of operational changes before the election prompted renewed scrutiny, and Congress doubled down on efforts to reform the agency’s structure and address its financial woes.
The agency faced renewed scrutiny partly because of a series of reported mail delays ahead of the 2020 election, in which a record number of votes were cast by mail. That year, Democrats sparred with Louis DeJoy, a megadonor who supported former President Donald J. Trump, over a series of cost-cutting measures, which were later postponed until after the election.
“Our country is pretty divided right now, let’s be honest,” Senator Rob Portman, Republican of Ohio and a key sponsor of the bill, said in a recent floor speech. “But one enduring reality about our country is that we have a post office that ties us all together, and everybody depends on that post office.”
The legislation also moves to address concerns about the agency’s continued service, after Democrats pushed back when the Postal Service issued a 10-year strategic plan last year that proposed reducing hours and lengthening delivery times. Instead, the measure that passed the Senate on Tuesday mandates a delivery standard of at least six days a week.
The bill would also impose new transparency standards for the agency, requiring regular reports to Congress about the Postal Service’s financial state and the publication of delivery data, which customers could search using a street address, a ZIP code or a post office box. It would also provide for expanded special rates for local newspaper distribution.
Some Republicans on Tuesday objected to the measure, calling it fiscally shortsighted and unsuccessfully pushing for last-minute changes to the bill.
“This bill doesn’t reduce costs — it just shifts them from one unfunded government program to another unfunded government program,” said Senator Rick Scott, Republican of Florida.
But several lawmakers hailed the bipartisan approval of the bill as necessary support for an agency that provides a crucial lifeline to their states.
“There is increasing realization that the Postal Service is absolutely essential for our country — it is the only organization that delivers to every single address in America,” Senator Gary Peters, Democrat of Michigan and one of the lawmakers who helped spearhead the measure’s consideration in the Senate, said before its passage. “It’s actually written into the U.S. Constitution as something that helps keep the country bound together.”
CNN adds this qualification:
While lawmakers from both parties have hailed the legislation as an important step for the USPS, Paul Steidler, a Postal Service expert at the Lexington Institute, told CNN it doesn’t go nearly far enough.
“The bill is woefully insufficient because it does nothing to improve mail service. It takes the pressure off of the Postal Service to better understand and to reduce its costs. And it doesn’t sufficiently empower the Postal Regulatory Commission, which right now is very small and has very tiny resources compared to the Postal Service.”
And this explainer:
Established in 1775 to promote the free exchange of ideas across the colonies, the Postal Service is among the country’s oldest government institutions — yet it operates with few of the financial benefits of being a federal agency while still bearing many of the costs.
Unlike other government agencies, the USPS generally does not receive taxpayer funding, and instead must rely on revenue from stamps and package deliveries to support itself.
And unlike private courier services such as UPS and FedEx, the USPS cannot excise unprofitable routes because Congress stipulates that the Postal Service delivers to all homes in America — including a remote community in the Grand Canyon, where the mail is delivered by mule. Postal Service pricing must be approved by the Postal Regulatory Commission, an independent government agency.
The next long overdue improvement is the removal of Louis DeJoy as Postmaster General.
In December, The Guardian reported, The US postmaster appointed under Trump is still raising alarm – but can he be stopped?
Joe Biden this month took another step toward the removal of the controversial postmaster general Louis DeJoy, even as the Trump-era appointee continues to make his mark on the embattled postal service, rolling out new plans to slow down delivery and close postal stations around the country.
DeJoy, a Republican logistics executive, caused a national furor last year over his attempts to slow down mail delivery before the 2020 presidential election, in which millions of Americans voted by mail.
Biden has not said outright whether he wishes to oust DeJoy, although his press secretary, Jen Psaki, has said she is “deeply troubled” by his leadership. Even so, the president lacks the authority to dismiss the postmaster general. That power rests with the USPS Board of Governors, a nine-member panel that can remove DeJoy with a majority vote. There were three vacancies on the board when Biden took office, and he filled those vacancies with Democratic allies earlier this year.
The Washington Post reported in September 2020 that staffers at DeJoy’s former business in North Carolina, New Breed Logistics, claimed that he or his aides pressured them to patronize fundraising events or contribute to GOP candidates.
Now the president has taken a further step toward reshaping the board by nominating two new governors to replace those whose terms are expiring. His decision not to renominate the Democratic board chairman, Ron Bloom, is significant, since Bloom was one of DeJoy’s biggest allies on the board and earlier this year said he considered DeJoy “the proper man for the job”.
Indeed, the postmaster general bought as much as $305,000 in bonds from Bloom’s asset management firm earlier this year, according to DeJoy’s financial disclosure paperwork. Bloom has said he doesn’t benefit from the purchase. The asset purchases and Bloom’s continued support for DeJoy led some Democratic senators to say they wouldn’t support Bloom’s renomination.
Even as Biden appears to inch closer to ousting DeJoy, the embattled postmaster general has begun to leave his mark on the agency. DeJoy abandoned his initial attempts to slow down mail delivery ahead of the 2020 election after he faced lawsuits and backlash, but soon after he announced a significant reduction in the agency’s 60,000-member administrative workforce.
DeJoy also released in April a 10-year plan for revamping postal operations. Some provisions are supported by unions and postal advocates, such as a $40bn investment in the agency’s vehicle fleet and logistics network, and modernizing thousands of retail post offices. The plan also calls for an end to a mandate that requires the USPS to fund retiree health benefits decades in advance, which postal management has decried for years as an unnecessary burden on its finances.
DeJoy’s plan would attempt to fill the postal service’s $160bn funding hole through a wide variety of cost-cutting measures.
The most significant change in the plan was the slowdown of first-class mail delivery, which took effect on 1 October. Under the new rules, long-distance mail can take up to five days to reach its destination before it’s considered late, up from the previous maximum of three days. DeJoy says these changes will improve the agency’s on-time performance and reduce what he says is an expensive reliance on air freight. The changes affect almost 40% of first-class mailpieces.
The postal service has achieved only modest performance improvements since rolling out the new standards in October. According to the agency’s most recent statistics, 91% of first-class mail deliveries have arrived on time since the launch of the new standards, up 2.5% from the previous quarter.
Nevertheless, it isn’t clear how much of the agency’s recent improvement is the result of DeJoy loosening the agency’s on-time standards.
“Great plan, loosen the standards so you can more easily reach the goal,” said Bob Dolan, a retired carrier from New Hampshire who spent more than 40 years with the agency. “I bet I could be a 90% free-throw shooter if they moved the free-throw line to five feet.”
Current postal workers who spoke with the Guardian on the condition of anonymity said that the changes hadn’t had much effect on their day-to-day workload over the past few months.
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The new delivery standard may have a more significant impact for small businesses that rely on the USPS. An analysis by the Washington Post found that states west of the Rocky Mountains and those at the nation’s geographical extremes would suffer the most under the new standards, with states like Nevada seeing an average increase of a full day in their mail delivery times.
The other controversial part of DeJoy’s plan is a proposal to close or reduce hours at dozens of low-traffic post offices around the country. This plan revives a previous “consolidation” proposal drafted under the Obama-era postmaster general Patrick Donahoe, who served from 2010 to 2015. The USPS paused that plan after a wave of backlash from unions and advocates. Multiple rural postal workers told the Guardian that reviving the plan could have wide-ranging impacts for customers in rural areas, many of whom rely on the USPS for deliveries of medicine and other essential goods.
“Consolidating stations adds quite a time and distance burden on [rural] customers,” said Tim Apley, a retired carrier who delivered for about 25 years in rural Spokane, Washington. Customers in rural areas would have to drive much farther if they needed to buy postal supplies or pick up packages that couldn’t be delivered, he said. “Meanwhile,” he added, “a lot of the savings from a consolidation are offset by the delivery routes driving much further each day.”
Even if the board of governors does replace DeJoy, it will be hard for the new postmaster general to fix the agency alone. Postal leadership lacks the unilateral authority to increase its prices or raise money with new initiatives like postal banking, meaning that whoever is in charge, Congress will need to step in to help the agency regain its financial footing.
These measures were not included in the bill approved by Congress.
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Kevin Kosar, a Senior Fellow at the American Enterprise Institute writes, “The One Crucial Thing Congress Is Missing With Its Postal Reform”, https://www.politico.com/news/magazine/2022/03/08/one-thing-missing-postal-reform-00015063
(excerpt)
Securing any bipartisan agreement in this town is a rare event, worthy of some celebration. But as someone who has watched the debate over the Postal Service for nearly 20 years, this one feels rather hollow.
The legislation will not change the Post Office in any way readily observable to the public. Uniformed letter carriers will continue to bring mail and boxes to American homes and post office boxes six days per week. Post offices will remain the drab retail outlets, and the plagues of mail theft and slipshod delivery performance presumably will continue.
The Postal Service Reform Act of 2022 is non-reform reform.
Mostly, the legislation will reduce the agency’s deficits, which have been in the billions for many years. The bill achieves this objective by relieving the USPS of $100 billion of compensation costs. Postal workers, to be clear, are not taking a haircut. Instead, USPS’ healthcare costs will be reduced by shunting them into a new, less expensive health plan and by enrolling more postal workers into Medicare upon retirement. The bill also abolishes the mandate that the Post Office prefund its retirees’ health care costs, which adds red ink to USPS balance sheets but did build a $40 billion nest egg for retirees.
The rest of the legislation deals with various administrative matters, such as altering the way the Postal Regulatory Commission submits its budget and requiring a study on the Post Office’s processing of oversized envelopes.
Ultimately, the bill fails to address two basic questions: What does America need from a post office in the 21st century, and how should we pay for it?
[T]he internet changed everything. Mail volume peaked in 2006, and subsequently has cratered 40 percent. Most mail today is advertisements, aka junk mail. Very little of it is person-to-person correspondence.
Meanwhile, e-commerce has flooded the Post Office with parcels. The revenues they bring have been a blessing, but they come with huge costs. The USPS’ delivery network was mostly designed to carry paper, from the mail collection boxes to the sortation machines to the mail carriers’ trucks and delivery bags. The agency is spending billions to retool itself to handle parcels, but also frets that parcel volume could taper or plunge should Amazon or other big shippers choose another deliverer.
It is a tough situation, one that requires Congress to come together and think big about the future of the USPS. How many days of paper mail delivery do we need? What parcels should the USPS deliver and which ones should be handled by the private sector? Should the USPS have a first responder role to deliver medication during a pandemic or biohazard attack? Should the agency’s employment policy continue to aim to provide middle class jobs? And should postage buyers, rather than taxpayers, continue to foot the bill for the Post Office?
Congress debated none of these issues. Instead, it triaged. Congress gave the agency $10 billion during the pandemic, and is now passing a non-reform reform bill that eases the agency’s financial crunch by shifting costs onto the public.
To be clear, getting any postal bill passed — beyond post office naming laws — is exceedingly difficult. Postal politics is inherently contentious, with unions, mailers and other interest groups battling for conflicting priorities. The Postal Service became even more of a lightning rod during the 2020 election and during the tenure of Postmaster General Louis DeJoy, who was maligned as a Trump minion who would steal the election and privatize the mails. That Democrats, Republicans, and DeJoy could find common ground is remarkable.
This is only the third reform bill to pass in half a century. Congress and the president can and will crow for enacting a bipartisan postal bill.
But make no mistake, they did so by dodging the tough questions of what the Postal Service should be in the 21st century. One day the country will need to have the discussion, and hopefully Congress will start it long before the next Postal Service crack-up ensues.