The (Continuing) Travails of the USPS
Here’s what’s been happening in the past couple of weeks:
Postmaster General Louis DeJoy (mega-donor to the Republicans, former owner of a logistics company he sold for $615 million in 2014, voted in unanimously by a [truncated] Board of Governors) testified before the US Senate on Friday [he’ll testify before the House on Monday], sort of promising, but not really, to halt further changes to Post Office processes until after the November elections.
Note: this doesn’t mean he’ll be reversing changes already effected, such as the removal of mail-sorting machines, mail boxes (the famous “blue boxes), etc. It’s unclear whether he’ll halt overtime cuts, the imposition of strict working hours, or limitations on trips by workers, however. All of these contribute to slower service, of course.
[DeJoy began ordering reforms and “efficiency-enhancing” measures with alacrity: “Within weeks, he began carrying out changes, including cuts to overtime and limiting mail delivery trips. He curtailed postal hours and mandated that carriers must adhere to a rigid schedule.”]
It was revealed this week that medications for veterans have been arriving late, social security checks delayed, and shipments of live produce – which the PO has expedited for ages –arriving, not to put too fine a point on it, deceased at their destinations.
[Note: DeJoy is already being sued by 24 states and a number of other groups. Even for an official in this Administration, that was quick.]
Some of the machinations that led to DeJoy’s appointment (he took up his post in mid-June) are described by both the Post and the NYT today, and yes, they were Byzantine.
Just to back up a bit:
For some reason, the President has it in for the USPS – and this animus dates back to his pre-Presidential days. We also know that he can’t stand Jeff Bezos (owner of Amazon and, among other things, the WaPo, which the President views as his enemy). Well, turns out that the USPS delivers for Amazon – especially that “last mile,” i.e. it goes where no private deliverers dare to go (think UPS, FedEx), and it gets Amazon packages to their destinations on time.
[See: “The president has long fixated on the Postal Service, complaining without evidence that it gives preferential treatment and money-losing terms to Amazon, a concern that associates say is rooted in his dislike of coverage in The Washington Post, owned by Amazon founder and CEO Jeff Bezos.”]
He appointed a task force in 2018, which made fairly predictable recommendations in line with privately owned logistics companies’ practices, and his team (mostly, Mnuchin, from what’s been revealed to date) set out to replace members of its Board of Governors and wear down the PG, Megan Brennan.
Backing up even further:
The USPS (it was re-christened in 1971; previously it was the “Post Office,” and its head was a full-fledged Cabinet Member appointed by the President and for many years the unofficial “head of patronage” of the party in power – it was an incredibly cushy, and highly-paid, sinecure. Even today, the PG earns just under $300,000 a year, and is the 2nd-highest paid federal official after the President) has been in financial difficulty the past 15 years or so for two major reasons, one external to itself (the rise of the Internet as preferred mode of communication, which has severely impacted 1st-class mail), the other, external (a bizarre and not-clearly understood 2006 bill forcing the service to front-load its pension/retiree health care plan (more than 600,000 employees, most of them unionized) 75 years in advance within 10 years – 2006-2016, in other words). The USPS has amassed $120 billion in that fund, which was supposed to be held in reserve – for retiree health care– but which is being regularly pilfered to pay down the national debt. While this legislation has now been rescinded (at least the contributions segment) and the agency’s failure to contribute for years forgiven, the PO has been running in the red for the past decade, supported by a $15 billion line of credit from the Treasury Department (thus the part played in all this by Steven Mnuchin, Sec of Treasury; see below).
Since it was re-structured as a separate, standalone federal agency in 1970, the USPS had been expected to be self-sustaining, supporting its costs through the sale of stamps and other postal products. But once the two factors noted in the previous paragraph kicked in, that’s been de facto impossible.
When this President took office, the 9-member Board of Governors (+ the PG) was short on members (that’s on the previous administration, by the way, and deserves a lot more coverage than it’s getting right now), so the President began reforming it in his own image. By last fall (2019), the reshaping – spearheaded by creditor-in-chief Mnuchin – was largely complete, with 4 Republicans, 2 Democrats, and a PG (Megan Brennan, who’d started her career as a postal carrier) on her way out; David Williams, the Deputy PG, resigned in protest in April; there are now 4 vacancies. A quorum of six is required for a full meeting, and no more than 5 members can belong to a single party, etc. This would suggest that there won’t be any more appointments – there’s a quorum, there are 4 Republicans, there’s a Republican PG, and that’s all the Administration requires to accomplish its mission.
DeJoy, who wasn’t on the original list of qualified candidates (around 20 people were interviewed by the Board, which makes the appointment), was ultimately elected (the behind-the-scenes dealings would be interesting to learn in detail; all the major players have, predictably, vowed that the nomination of someone who had no public service record – let alone any record with the USPS – and wasn’t deemed qualified, was on the total up-and-up).
In the meantime, the pandemic had arrived. This meant that (a) the USPS was understaffed almost immediately as employees became ill and had to go out on sick leave; (b) the volume of deliveries rose sharply due to orders by people who had ceased to shop in brick and mortar stores and were ordering nearly everything online for home delivery.
DeJoy took office and immediately forbade overtime work. Predictably:
“DeJoy banned extra trips to ensure on-time mail delivery. If mail arrived late to distribution centers, or was not sorted in time for a carrier to take out to the street, DeJoy ordered the items sit behind for a full day.
The policies dovetailed to cause days-long backlogs in localities across the country, postal workers said in interviews. Some processing facilities are still up to a week behind.”
It turns out that:
“Privately, DeJoy had secured the $10 billion loan from Treasury by agreeing to turn over copies of the contracts the agency has with Amazon, UPS, FedEx and other firms that use its ‘last-mile’ services. They are subject to confidentiality agreements.”
[Note: That $10 billion is probably sufficient to tide the agency over during the pandemic, given the huge increase in package deliveries, which have provided a much-needed cash infusion.]
DeJoy’s questioning by the Senate wasn’t very reassuring – it was a classic instance of bureaucratic double-speak by the PG, who both absolutely promised that mail-in ballots wouldn’t be delayed (pace an announcement by the USPS itself, which has warned no fewer than forty-six states that they might very well be delayed; here’s a sample letter sent to the NC Governor) and at the same time, refused to undo any of the damage he’s already managed to accomplish to delivery rates in his scant eight weeks on the job.
In case it’s not clear what DeJoy seems to have been hired to accomplish – turn the USPS, the country’s oldest and perhaps most revered public services – into a mass-scale version of his logistics company – here’s David Dayen, who started following the story early on:
“It’s important to understand that this is a function of cost-cutting business management style being overlaid on a public service, leading to an inability to perform the service. The Postal Service has allegedly been dysfunctional for years, to hear Republicans on the committee tell it. Yet it typically got the mail out on time, building expectations and trust in the eyes of the public.
DeJoy came in with the attitude of running the Postal Service like FedEx or UPS, with rigid delivery schedules that mismatched with the way the post offices in the field operate.”
DeJoy “…had no idea about the impact of his policies and the potential (now realized) for a breakdown, and failed to take into account the critical nature of this essential national infrastructure.”
And “DeJoy is taking his ‘just in time’ bare-bones logistics mindset to an essential service that needs redundancy in the system in order to ensure proper delivery. He’s putting cost control ahead of the job function.”
Senator Maggie Hassan (D-NH) observed during the hearing that her state was down to a single mail-sorting machine; it recently broke down, and made sorting – and delivery – practically impossible.
There’s a bedrock difference between private enterprise and the public services here that cannot be repeated often enough: the goal of the former is profits (for shareholders), and goal of the latter is accomplishing the job no matter what it takes (for everyone, everywhere).
And no, the two goals are not “compatible.”
Dayen says it really well:
“One thing is clear: DeJoy’s ‘business acumen,’ as praised by Kentucky Republican Rand Paul, was the entire problem. Running universal public services like a business hurts people. Now we have a major real-world example.” [emphasis added]
On Saturday (22 Aug.), the House (which is in session, in contrast to the Senate, which remains on vacation) passed a standalone $25 billion dollar coronavirus relief bill for the USPS. We mention this pro forma, as it is unlikely to receive even so much as a hearing in the Senate once the latter body returns to session on 8 September.
The President weighed in via Twitter:
“This is all another HOAX by the Democrats,” the president wrote, “to give 25 Billion unneeded dollars for political purposes, without talking about the Universal Mail-In Ballot Scam … Only ABSENTEE BALLOTS are acceptable!”
[Note: Absentee ballots and mail-in ballots are, procedurally, handled in identical fashion; what the President – who regularly mails in his absentee ballots himself – is actually opposed to is states mailing ballots to voters proactively, a process which contributes to more people voting.]
Rep. Gerald E. Connolly (D-VA), chair of the House panel which oversees the USPS: “Who else has taken on the post office in 244 years?”
Who, indeed.
Further reading:
“How Trump, Mnuchin and DeJoy edged the Postal Service into a crisis”
“House Democrats pass $25 billion bill to fund US Postal Service”
“Mnuchin Paved Way for Postal Service Shakeup”
“What We Learned from the Senate Hearing on the Postal Service”