Lawmakers are pushing for a $25 billion cash injection to the Postal Service as part of another forthcoming stimulus package.
President Trump this week dismissed requests for emergency funding for the cash-strapped U.S. Postal Service, attributing its financial woes to mismanagement as the agency sounds the alarm about the negative impacts of the novel coronavirus pandemic.
Prior to the passage of the Coronavirus Aid, Relief, and Economic Security Act, House Democrats unveiled a plan for a different stimulus package that included a $25 billion cash injection into the Postal Service. The Senate compromise left that provision out, instead providing USPS with a $10 billion line of credit. In a letter to congressional leadership on Tuesday, a group of House Democrats renewed their push for a $25 billion appropriation in a forthcoming “phase four” coronavirus relief bill expected to receive a vote in the coming days.
Asked about that proposal on Tuesday, Trump said the Democrats were taking the wrong approach.
“They have to raise their prices,” Trump said. “Otherwise, they’re just going to lose a lot of money. And tell your Democrat friend that he ought to focus on that, because if he focused on that, he could truly save the Post Office. The Post Office has been losing billions of dollars a year for many, many years. And have him take a look at that, because that’s the way to solve the problem.”
The president repeated a debunked claim that USPS is improperly taking a loss on its deliveries for large-scale shippers like Amazon.
“If they’d raise the prices by actually a lot, then you’d find out that the Post Office could make money or break even,” Trump said. “But they don’t do that. And I’m trying to figure out why.”
The president criticized the “independent boards” that govern USPS rates, referring to the agency’s board of governors and the independent Postal Regulatory Commission. He falsely claimed the members of those panels were appointed by “other administrations;” all five of the current Senate-confirmed members of the USPS board were nominated by Trump, while he nominated three of the five PRC commissioners. The Postal Service has sought more autonomy in setting its rates, though PRC has mandated that some caps remain in place. Other stakeholders have cautioned that raising prices too dramatically will disincentivize large-scale mailers from using the Postal Service and encourage ecommerce giants like Amazon to expedite the development of their own delivery networks.
Rep. Gerry Connolly, D-Va., who has spearheaded the call for a postal stimulus in light of declining revenue during the coronavirus crisis, said Trump’s answer was an evasion.
“He didn’t answer directly,” Connolly said. “Instead, he ranted about raising rates on American customers. The Postal Service is in crisis and needs assistance.” He added that Trump’s plan for USPS is “to simply privatize it,” referring to a 2018 White House government reorganization plan that included such a proposal.
Dave Partenheimer, a USPS spokesman, said the borrowing authority the agency received could be insufficient to keep it operational.
“The Postal Service appreciates the inclusion of limited emergency borrowing authority,” Partenheimer said. “However, the Postal Service remains concerned that this measure will be insufficient to enable the Postal Service to withstand the significant downturn in our business that could directly result from the pandemic. Under a worst case scenario, such a downturn could result in the Postal Service having insufficient liquidity to continue operations.”
In his letter this week, co-written by Rep. Carolyn Maloney, chairwoman of the House Oversight and Reform Committee and five other Democrats, Connolly also suggested Congress appropriate $250 million to pay for unfunded mandates lawmakers have imposed on USPS, shift postal retirees to Medicare as their primary health care insurer and enable the mailing agency to conduct more non-postal business.
“Increased lending authority is insufficient to ensure that the Postal Service can continue to operate,” the lawmakers said, highlighting a Postal Service analysis that found it would be unable to operate past this summer without additional funds. “As the coronavirus continues to worsen, the Postal Service projects a possible 50% decline in mail volume between now and the end of the current fiscal year.”
It is unfair to bail out the airline industry while leaving the 630,000 USPS employees and the industry they support hanging in the balance, the House members said.
“Postal workers are on the frontlines of this crisis, delivering essential information, packages and services to the American people,” they wrote. “ We cannot afford to lose this massive infrastructure, with access to every resident and business in the country.”
Partenheimer said the Postal service is providing “an essential public service in the midst of this pandemic,” but that service could be in danger going forward.
“We continue to see a rapid decline in mail volume and a significant loss in revenue due to the national decline in economic activity resulting from the COVID-19 pandemic, which puts our ongoing ability to provide our vital federal service at risk,” he said. “We will continue to work with policymakers to ensure that Americans have access to the mail during this critical time in our nation’s history.”
In addition to its financial struggles, USPS has faced concerns among its workers for their own safety. Employees at some postal locations have reported insufficient equipment and supplies to fight off the spread of the coronavirus, and hundreds of employees have contracted COVID-19, the disease that results from the virus.