Postal Updates

Taxpayer funds come to the U.S. Postal Service’s rescue

Apr 13, 2021, 3 PM

Washington Postal Scene by Bill McAllister

For years the United States Postal Service has added the following statement to most of its news releases, “The Postal Service receives no tax dollars for operating expenses and relies on the sale of postage, products and services to fund its operations.”

Recently it has become increasingly evident that the self-financed federal agency might have to modify that claim.

Two actions make clear that the financially troubled USPS is having to turn to taxpayer resources to reduce its sea of red ink.

First, on April 9, President Joe Biden’s administration threw its support behind funneling more tax dollars to fund the agency’s new next generation mail delivery fleet.

Second, the Postal Service acknowledged on April 2 that it has accepted $8.64 billion of taxpayer funds to offset some of its losses during the COVID-19 pandemic.

Both steps seem to reflect the reality that the USPS cannot make it on its own without taxpayer support.

In an April 9 request to Congress, Biden sought $600 million for electric vehicles and charging infrastructure for 18 federal agencies.

The request specified that funds would be used by the General Services Administration “for other agencies and for United States Postal Service charging infrastructure.”

In testimony before the House Committee on Oversight and Reform on Feb. 24, Postmaster General Louis DeJoy conceded that only 10 percent of the initial next generation delivery vehicles the USPS is ordering will be electric powered.

One of the reasons, he said, was the high cost of building charging equipment at postal installations.

Noting that the Biden administration has pledged to move the entire federal vehicle fleet to electric power, some of DeJoy’s congressional critics have complained the USPS is not moving rapidly toward an all-electric mail delivery fleet.

Separately the Postal Service confirmed that it has begun drawing emergency COVID-19 relief from a $10 million appropriation.

“ … We have been reimbursed for such expenses in the cumulative amount of $8.64 billion,” the Postal Service said in a brief statement. It did not offer any details of what expenses it had charged as COVID-related damages.

The lack of detail troubled Paul Steidler, a senior fellow at the Lexington Institute in Arlington, Va., who has followed postal issues.

Steidler said in an April 6 statement that the USPS “owes Congress … and the American public an explanation about this and large budgeted amounts in its recently announced 10-year strategic plan.”

Stephen Kearney, a former senior postal executive who now heads the Alliance of Nonprofit Mailers, has long argued the USPS should get some federal tax dollars for some of the many mandates that Congress has laid on it.

The postal bureaucracy has resisted the obvious step of seeking some taxpayer funds to offset the growing deficits the agency faces.

Why?

“I think postal leadership is compartmentalizing,” Kearney said in an email to Linn’s.

“They are trying to make the place work within the laws and rules they’ve been given,” he said.

“For whatever reason, they take self-supporting and six-day delivery as givens that they will not challenge,” he said.

Part of the Postal Service’s resistance to seeking funds is “they don’t want Congress more involved in their operations,” Kearney said.

As a result, the new strategy for the DeJoy-led USPS is built on changing postal retiree rules, according to Kearney. A key change would make Medicare the primary health insurance for retirees.

Kearney also said the new strategy is based on “being able to milk captive mailers for several-times-higher-than-inflation rate increases and taking a significant package market share away from some of the most successful companies in the world — FedEx, UPS and Amazon.”

But, Kearney concluded, “There are long odds against all that happening.”

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