Postal Updates

Trump threatens loan veto unless USPS raises package mailing rates

Apr 28, 2020, 4 PM
President Donald Trump has railed against the United States Postal Service since taking office in January 2017.

Washington Postal Scene by Bill McAllister

President Donald Trump has threatened to veto any financial loan to the United States Postal Service unless it immediately raises the price for mailing parcels.

The president voiced that threat the day after the Washington Post disclosed his administration was seeking to place restrictions on a $10 billion loan Congress approved for the financially strapped federal agency.

“The Post Office is a joke,” Trump told reporters at a bill-signing ceremony April 24. “The Post Office should raise the price [of package delivery] four times.”

Trump confirmed that is one of the conditions he is demanding for approval of the loan. “If they don’t raise the price, I’m not signing anything,” the president said.

That same day, the president retreated slightly from his criticisms of the USPS.

In an April 24 tweet, Trump said: “I will never let our Post Office fail. It has been mismanaged for years, especially since the advent of the internet and modern-day technology.”

“The people that work there are great, and we’re going to keep them happy, healthy, and well!” he said.

Trump made clear he will not allow Department of the Treasury Secretary Steven Mnuchin to approve the loan if prices aren’t raised.

The Trump administration’s moves against the independent federal agency were disclosed by the Post April 23 in an article that said the actions would “fulfill President Trump’s longtime goal of changing how the service does business.”

Among the measures that Mnuchin was said to have sought were higher prices for parcels, wage concessions from postal unions, and a say on who will be the next postmaster general as well as other top hires at USPS.

Since Congress agreed to remove the Postal Service from the president’s cabinet and make it an independent federal agency in 1971, those decisions have been left to the Postal Service’s board of governors and postal executives.

The board, composed of presidentially appointed members, is charged with overseeing the USPS.

Postal Service spokesman David Partenheimer told the Post that the agency has started “preliminary discussions” over the loan.

He said the Treasury Department has not asked “to impose any of those conditions on that borrowing authority” but he declined to say whether any of the restrictions the Post disclosed were under discussion.

Congress approved the $10 billion loan to the USPS as part of its massive $2 trillion package to deal with the impact of the coronavirus COVID-19 pandemic.

The Postal Service, saying the virus was weakening its already precarious financial situation, wanted an outright grant of millions to deal with its towering debts.

Rep. Gerald Connolly, D-Va., chairman of the House of Representatives Subcommittee on Government Operations, which oversees the USPS, said Trump vetoed the grant idea but that the $10 billion loan was approved.

The Post said that Mnuchin sent aides last fall to inform the board of governors that the Trump administration wants changes to the credit line of $15 billion that the Postal Service has long enjoyed.

Connolly said Democrats will fight the administration’s efforts to place conditions on the loan.

“If Mnuchin wants to play this kind of game with the Postal Service, I think it is time for the Postal Service to tell him they’re not going to agree to unacceptable conditions, and that means Mnuchin will have his hands on the disruption of services this fall,” the lawmaker told the Post.

“I think it’s time to stare him down and this White House down, and for Congress to decide [if we are] going to stand with the Postal Service as we know it,” Connolly said.

Trump has railed against the Postal Service since taking office in January 2017. He has attacked the discounted rates it has given Amazon, the giant online retailer, saying that the discounts have helped cause the Postal Service’s financial woes.

The president told aides he wanted Postmaster General Megan J. Brennan out before she announced her retirement on Oct. 16, 2019. She has postponed her retirement, which was scheduled for Jan. 31, 2020.

Brennan resisted Trump’s charges over Amazon, saying its postage rates have been blessed by the independent Postal Regulatory Commission.

Post writer Glenn Kessler awarded Trump four Pinocchios April 27 for his statement that the USPS loses money on every parcel it handles from e-commerce sellers like Amazon.

Kessler, who regularly chronicles the president’s statements for accuracy, said that the Treasury Department could not confirm the president’s claim.

“In the end, Treasury cannot show us USPS is actually losing money on its contract with Amazon, as Trump claims,” Kessler wrote.

“It can assert only that USPS does not know whether it makes a profit” from handling packages from Amazon, he said.

The Postal Service has said that its contract with Amazon has been approved by the Postal Regulatory Commission and complies with all postal rules.

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