Democrats accuse President Trump of trying to steal the election by sabotaging the U.S. Postal Service and starving it of funding, but industry experts say the agency’s woes are the product of years of financial mismanagement.
Long-running problems have come to a head, though, as states plan for greater mail-in voting as a response to the pandemic, drawing resistance from Trump, who has long criticized both mail-in voting and the Postal Service.
“Big picture, the Postal Service had huge financial problems from before Trump,” said Thomas Schatz, the president of Citizens Against Government Waste, a fiscally conservative government watchdog group. “They’ve lost so many billions in the past few years.”
The Postal Service is meant to be self-sufficient, but it’s been deeply in debt for more than a decade now. Total losses since 2007 run to $78 billion, according to a May report by the Government Accountability Office, which said that the “USPS’s current business model is not financially sustainable.” The analysis noted that mail volume has fallen nearly in half over the past 15 years as people have increasingly conducted business and correspondences online.
“Our financial position is dire, stemming from substantial declines in mail volume, a broken business model, and a management strategy that has not adequately addressed these issues,” Louis DeJoy, the new postmaster general, said last week in his first public remarks since taking the job in June.
“Without dramatic change, there is no end in sight,” DeJoy said.
DeJoy, a former shipping executive and a donor to Trump’s campaign, is trying to reform the Postal Service by pushing to reduce overtime costs and streamline deliveries.
Some Democrats have said the Trump administration’s postal reform efforts will suppress voting and unfairly influence the election, especially by making it more difficult to vote by mail, which many more people will seek to do because of the pandemic.
Democrats and some postal workers claim that DeJoy’s reform efforts, including a plan to remove hundreds of high-volume mail sorting machines and cut overtime hours, have slowed the delivery of mail just a few months before the election. The Postal Service has acknowledged some delays but blamed the difficulties with speed on the coronavirus pandemic.
The Postal Service said last week that the machine reductions occurred amid decreased mail volume this year and that such changes will make the agency more efficient and cost-effective.
Democrats’ push to stop the overhaul efforts succeeded, and DeJoy announced Tuesday that he would temporarily suspend the reforms “to avoid even the appearance of any impact on election mail.”
The Trump administration has denied that the post office is making changes to slow down mail delivery. The Postal Service has repeatedly said it has ample capacity to handle the added volume of mail-in ballots in November’s general election. The post office handles more than 140 billion pieces of mail a year, according to the GAO.
Whether or not to give the Postal Service additional funds (and if so, how much) has been a point of contention between Democrats and Republicans.
The March CARES Act coronavirus relief bill gave the Postal Service $10 billion in borrowing authority, which the agency has not used yet due to months of negotiations over the terms of the loan with the Treasury Department. Some liberals have suggested the talks resulted in the post office acceding to the policy demands of the Trump administration.
Trump has also muddied the waters, suggesting last week that he opposed granting funding to the post office because it would use the money to process “fraudulent” mail-in ballots. And for years, he’s pushed the Postal Service to change its pricing to charge Amazon more for packages.
Yet Trump has said that he would sign extra post office funding into law if it were passed as part of a relief bill. Democrats want to bolster funding for the Postal Service by $25 billion. Republicans rejected the $25 billion amount, and Trump officials instead offered $10 billion, which was not accepted by House Speaker Nancy Pelosi.
The Postal Service has approximately $14 billion in cash right now and is projected to run out of funds at some point in the second half of next year.
However, giving the Postal Service money alone won’t solve its problems, said Schatz. Giving the post office federal funds has to be tied to reform efforts, he argues, because allowing it to run the way it was before the pandemic will only result in more losses.
DeJoy’s reform efforts are in line with what previous postmasters general have done and are needed to increase efficiency, cut costs, and make the business model sustainable, multiple experts on the Postal Service told the Washington Examiner.
“The biggest single cause of financial instability within the Postal Service has been the drop in demand for mail and transitioning from a physical world to a digital one,” said Arthur Sackler, who runs the Coalition for a 21st Century Postal Service, a group representing the biggest bulk mailers.
Sackler also said that prefunding retiree health plans has caused $55 billion of the $78 billion of debt the Postal Service has acquired in the past decade. He said it is one of the only entities, public or private, that has to fund its retirees’ health plans in advance. There has, however, been pushback to this narrative that prefunding is the cause of the Postal Service’s financial difficulties by the conservative Heritage Foundation.
The Postal Service has struggled with controlling costs because it is heavily unionized, said Kevin Kosar, vice president of policy for the R Street Institute, a libertarian think tank.
“The discretion to move things around internally is low. They wait for people to retire from the post service and then just don’t rehire, which takes a long time to happen,” said Kosar.
Sackler and others in the industry, including the American Postal Workers Union, have supported a bipartisan Senate bill that would provide the Postal Service with up to $25 billion in emergency relief for losses and expenses that result from the coronavirus pandemic, not any previous losses or debt obligations.
The bill was introduced in July by Sens. Dianne Feinstein, a Democrat from California, and Susan Collins, a Republican from Maine.
