"Stop Panicking About The Post Office!"

"Stop Panicking About The Post Office!" Tyler Durden Mon, 08/17/2020 - 21:10

Authored by Nick Harper via Medium.com,

A lot of fear and misinformation has been spreading throughout social media the past few days about the post office. People seem to think the sky is falling. But they’re missing a lot of important context.

I am here to tell you that yes, you should be concerned about the future of the United States Postal Service (USPS), but the whole sky isn’t falling quite yet.

So, stop panicking! Being concerned and taking specific, practical action is good; panicking on social media is bad.

Let’s check some facts, shall we? I know this is long, but please stay with me.

The U.S. Constitution creates the post office and requires Congress to fund it.

False.

Several people seem to be under the belief that the Constitution mandates the existence or funding of the United States Postal Service. The U.S. Constitution does mention the postal system in a sense, but doesn’t create the post office or require its funding. Article I, section 8, clause 7 of the Constitution gives Congress “the Power […] To establish Post Offices and Post Roads.”

It requires nothing; it merely permits Congress to act, if Congress so chooses. The clause gives Congress the ability to create post offices and the implied authority to create and provide services through the United States Postal Service. And Congress has.

USPS relies on Congress for funding.

False.

USPS is an independent agency that is almost exclusively self-funded since 1971. It may receive some small appropriations for “public service costs” and “revenue forgone.”

Public service costs are “reimbursement to the Postal Service for public service costs incurred by it in providing a maximum degree of effective and regular postal service nationwide, in communities where post offices may not be deemed self-sustaining.” 39 U.S.C. 2401. USPS may request an appropriation for public service costs for up to $460 million annually. However, USPS has not requested or received this reimbursement since 1982.

Revenue forgone is funding providing to subsidize the mailing costs of groups such as the blind and overseas absentee voters. Under the Revenue Forgone Reform Act of 1993, USPS was supposed to receive about $29 million in appropriations every year from 1994 through 2035, but for most years, that funding has not actually been appropriated.

For context, USPS’s revenue for the fiscal year ending in 2019 was $71.1 billion. So these payments would make up less than 7% of USPS revenues even if the agency did receive the payments.

But USPS has asked this year for an emergency appropriation from Congress. Read the next bit on that.

USPS is in financial distress and will be insolvent before the November 2020 election.

True about the distress; insolvency is off by 10 months.

USPS is in a financial bind. The agency has had a net loss for most of the last several years. This is because the demand for shipping letters and flats (large envelopes, newsletters, magazines) has declined steadily for over two decades. Costs for shipping letters and flats, however, have not declined as much. Less revenue with the same costs has resulted in USPS taking financial losses.

COVID-19 has exacerbated these issues even further. Mail volume dropped, while expenses, like for PPE, increased. So much so that USPS sought a $50 billion emergency funding and the authority to borrow another $25 billion from the Treasury. This was contemplated for the CARES Act that addresses so many other COVID-19-induced financial crises. USPS estimated in the spring that they would have an estimated $13 billion budget shortfall (compared to a $9 billion shortfall in fiscal year 2019).

But we now know that USPS will survive at least a little longer. While their income is still not what it needs to be, the increase in online shopping during COVID-19 has helped it stay above water. And the Treasury made a $10 billion loan available.

In its fiscal quarter report filed June 30, 2020, USPS indicated that it has “sufficient liquidity to continue operating through at least August 2021.”

So USPS is in a critical condition, but it does not appear that it will shut down before the November election.

USPS is in distress because it is required to pre-fund retiree pensions and health benefits.

Mostly true, but that’s not the only reason.

This is a pervasive half-truth. The Postal Accountability and Enhancement Act of 2006 required USPS to pre-fund future retiree health benefits (not pensions though). Previously, like most agencies, it funded these benefits on a pay as you go basis: the benefit is claimed, then they pay the bill. Instead, USPS was supposed to pay $5–6 billion per year from 2007 until 2017 into a retiree health benefit fund (RHBF) that is supposed to cover retiree health benefits for over 50 years. The idea is that pre-funding these benefits ensures that the benefits get paid even if USPS does go into crisis.

The problem is that USPS hasn’t been paying into the fund since 2012, and didn’t even make full payments in every year before that. It was supposed to have completely funded the RHBF by 2017, yet less than 44% is actually funded. It has become clear the current RHBF requirement is not sustainable and is harming USPS’s financial survival.

But despite the dour situation surrounding the RHBF, the payments are not the sole cause of USPS’s net losses. Remember, the payments were less than $6 billion each year, and payments were supposed to stop in 2017. A table from the Task Force on the United States Postal System — a group put together by an executive order of President Trump — can help us uncover the truth.

USPS Revenue and Expenditures table, FY 2010 through FY 2018

The third row of the table demonstrates what USPS’s net income or loss would have been without the RHBF. USPS would have only reported losses in 2010–2012, but would have not lost money through 2018. Payments for RHBF have stopped, but USPS is still accruing new costs of $3–4 billion per year. On the other hand, USPS had a loss of $8.8 billion for fiscal year 2019, and will likely have at least an $11 billion shortfall for fiscal year 2020. These losses are greater than the annual accrual for the RHBF. So without the RBHF, USPS would have still had losses for 2010, 2011, 2012, 2019, and 2020–five of the last ten years.

This means that while a significant portion of the financial trouble can be attributed to the RHBF, USPS is still incurring other losses that would result in a net loss in some fiscal years even if the RHBF mandate did not exist.

Buying stamps or other merchandise from the USPS gift store will save the post office.

Probably false. Sorry.

Don’t get me wrong. Definitely shop at the USPS gift store. There’s some cool stuff in there (like this crop top, which is currently sold out, but maybe your dog needs a postal carrier costume).

But the billions of dollars USPS needs to become financially stable is probably not going to come from profits on USPS merchandise, assuming there’s even enough stock of that merchandise to begin with.

And buying stamps is nice. But unless you’re throwing those stamps away and buying new stamps when you actually need them, you’re not actually increasing USPS’s revenue. You’re just shifting when they receive the money. Rather than pay for a stamp when you need it in the future, you’ve paid for it now. So USPS has more income now, but less later.

I know this one’s a real Debbie Downer, but it’s good to be realistic about what actually will help and what won’t.

The new Postmaster General is a big donor and partisan operative, Louis DeJoy.

True.

Louis DeJoy is a large donor to President Trump and the Republican National Committee. But Trump is not the first president to put a large donor in a key position. It is also worth noting that DeJoy is the first postmaster general in two decades who has not risen through the ranks of USPS in some other capacity before being appointed to the position. To DeJoy’s credit, he does have a long career in logistics and operations, which is the key area of expertise needed for managing the expansive, complex network of our mailing system.

The appointment of DeJoy was entirely Trump’s choice alone without any checks or balances.

False.

The Postmaster General is selected by the Board of Governors. The Board of Governors is appointed by the president with advice and consent of the senate. No more than 5 of the 10 Governors may be from the same party. There are currently multiple vacancies on the board. At the time that DeJoy was appointed, three were Republican and one was Democrat. DeJoy was unanimously selected by that board. DeJoy was appointed in early May, and did not fully transition into his position until June. An additional Democrat and an additional Republican have been appointed since then.

USPS just started having these problems since Dejoy started.

Half-true.

USPS has definitely been experiencing some problems with service lately. And below I get into some specific allegations. But USPS’s service woes cannot be entirely attributed to DeJoy and his policies.

Many communities, for example, experienced significant delays and even some non-deliveries during their primary elections this year, long before DeJoy took his role. Issues have ranged from changing operations to avoid COVID-19 spread, workforce shortage due to COVID-19 quarantines and illness, working out kinks of handling mail voting where it’s new or increased substantially, and managing the influx of packages due to increased online shopping.

There also have been some changes to delivery policies since July that have slowed service. These changes were put into place by DeJoy. However, they generally fall into a few categories:

• Stay on schedule

• No overtime

• No errors

• No duplicate work

Those elements aren’t a recipe for disaster; to the contrary, they’re the main ingredients to staying organized and cost-efficient. And while people are panicking because the document suggests mail will be left to sit, the document is clear:

One aspect of these changes that may be difficult for employees is that — temporarily — we may see mail left behind[], which is not typical. We will address root causes of these delay and adjust the very next day. Any mail left behind must be properly reported, and employees should ensure this action is taken with integrity and action.

The key word being temporarily. The context of the document supports that mail is not intended to sit for days. A piece of mail may be left behind on one day merely because it missed the boat, so to speak, but it will be delivered the next day.

DeJoy fired the whole leadership team of USPS in a Friday Night Massacre.

False.

This is in reference to the Saturday Night Massacre, when Nixon fired several high level staffers or forced them to resign in an attempt to cover up the Watergate Scandal. DeJoy did make some changes to the leadership of USPS when he became Postmaster General. But leadership changes when there’s a new Postmaster General is not unusual. In fact, the previous Postmaster General, Megan Brennan, made her own leadership changes when she took the position in 2015 and made leadership changes again in January 2019.

“The announcement on Friday set forth a change to organizational structure only,” USPS spokesman David Partenheimer told Motherboard. “The announcement did not include any terminations or layoffs and very specifically stated that the changes did not initiate a reduction in force and there were no immediate impacts to USPS employees.”

Source.

In fact when you compare the organizational charts from before and after the announcement, you can see that most of the changes are actually promotions of existing staff in a slightly different organizational structure. So it would be misleading to liken the situation to a Saturday Night Massacre.

DeJoy is making illegal or unethical investments in competitors of USPS.

To be determined.

DeJoy and his wife own stock in companies that have a stake in the package delivery business. $30 million is in his former company, XPO Logistics, and he recently bought stock options on Amazon.

Former director of the Office of Government Ethics, Walter Shaub, says the situation “doesn’t pass the smell test.” The law prohibits officers of independent agencies like USPS from having financial interests in companies that intersect with their official duties, which has been interpreted to include possession or transactions of stocks. 18 U.S.C. 208.

But Peter Schweizer, president of the Government Accountability Institute, told USA TODAY, “The postmaster general is not required to divest of all of his assets in these kinds of investments. However, he needs to steer clear of decisions that would materially benefit the companies he is invested in.”

The Inspector General for the USPS — the watchdog who ensures there’s no waste, fraud, or corruption — is already opening an investigation and will make the final determination.

USPS is (re)moving blue mail collection boxes.

True, but for cost-efficiency reasons, and they almost immediately stopped.

A wild panic spread through social media on Friday, August 14, because people were sharing photographs of piles of blue mail collection boxes being hauled away. USPS admitted that it was removing some mail collection boxes, and transferring some to other locations.

First, some of the images floating around social media are misleading or have false captions. (False information on social media? Shocker!) So don’t believe everything you see on social media; stop sharing unless you can verify.

Second, USPS has already paused removal and transfer of collection boxes until after the election. It realized they were causing a panic, and will delay its actions until a later date when people are less paranoid.

Next, let’s discuss the rationale. People panicked because they assumed this was a tyrannical attempt to prevent mail voting. But there are costs associated with a low-use collect box, and there may come a time when the collection box become too much of a cost burden. It costs money to travel to and check a collection box that sits empty or collects very few envelopes. And collection boxes are moved all the time to adjust to the ebb and flow of mail volume. Given USPS’s financial crisis, it seems reasonable to believe that these changes were to increase efficiency.

However, a local news station in Montana checked on what collection boxes had been removed. Despite the justification that these mail collection boxes were rarely used, the boxes were in high traffic areas: outside a grocery story, next to a University, in downtown Missoula, etc.

In Morristown, New Jersey, there was similar panic. But it turns out that those collection boxes were replaced the next day with new collection boxes that are more secure to prevent “fishing” (dropping a string with an adhesive into the box to pull out the mail already deposited inside of it).

So hopefully DeJoy will have some sort of public statement to explain how he has determined which collection boxes should be moved.

USPS was destroying mail-sorting machines used to sort mail-in ballots.

True, but likely for cost-efficiency reasons.

So, yes, USPS is deactivating mail-sorting machines that sort some types of mail, including mail ballots. Some of these are being relocated, but there does appear to be an outright reduction going on with the remainder being dismantled. But despite the phrasing by Vice that the documentation shows “plans to hobble mail sorting,” the intention does not appear to be to slow the sorting of mail.

Vice does have the good sense to note that the plan to reorganize and rightsize the sorting machines is dated May 15, a month before DeJoy took office and less than a week after the Board of Governors announced his selection. Not only that, but the document shows that earlier deadlines were missed and gives extended deadlines, which implies that this plan had already been around for quite some time.

And other facts back the reasoning of the plan. The type of mail these machines sort are decreasing in volume, including down more than 15% just this year compared to last year.

In other words, DBCSs have less mail to sort than they ever have before and it’s far from clear how much of that mail is ever coming back. So it stands to reason the USPS might not need as many of them.

The necessity and prior existence of this plan is further enforced by the Inspector General’s September 2019 report on processing network optimization. The report describes how USPS has been trying, and failing, to consolidate processing and rightsize infrastructure in order to reduce costs. In fact, the issue has been researched since as early as 2012 by the Government Accountability Office, and the volume of mail has only declined further since then.

This action also aligns with the five-year strategic plan that was published before DeJoy was even selected: “Continuously optimize location of network processing operations and equipment as mail volumes decline and parcel volumes increase.”

Postal workers argue that USPS should keep the machines, but not use them, in the off chance that they’re needed or parts can be used to fix ones that are being used. I see the reasoning in that, so I would like to hear more from DeJoy on this as well.

USPS told election officials that voters’ ballots won’t arrive in time to be counted.

True, but not in the way you think.

This one is mostly a miscommunication issue. USPS has warned 46 states about how it can handle election mail. But the letters are an attempt to preserve the election, rather than undermine it.

When local election officials distribute pre-paid postage envelopes with absentee ballots, they have two options: use First Class Mail or use Marketing Mail. First Class Mail is more expensive but faster (2–5), whereas Marketing Mail is cheaper but slower (3–10 days).

Apparently, USPS has informally treated both types of election mail the same, expediting both whenever possible. So local election officials have been opting for Marketing Mail in order to save on costs. (Side bar: elections are funded at the local level and chronically underfunded.)

But USPS cannot do that anymore, because it’s costly. And therefore, election mail will be treated as its paid category. This means some election officials may be advising voters to return ballots on timelines that wouldn’t actually meet the state law’s deadlines. For example, many election officials are saying to return mail ballots a week ahead of time; but seven days might not be enough time for some Marketing Mail, which could take up to ten.

So, again, the letter from USPS was an attempt to warn election officials and preserve the election, rather undermine it. If DeJoy had wanted to undermine the election, he simply could have chosen not to warn the election officials at all.

These changes are motivated entirely by partisan attempts to shut down mail voting during COVID-19 and rig the election.

I can see why you would think that, but I don’t think so. Trump claims a lot of stupid things, and some of these changes were contemplated long before DeJoy, or even Trump.

This is the part I’ve been building up to.

Let’s start with Trump. People have claimed that Trump wants to slow down mail delivery through DeJoy in order to rig the election. Trump, being who he is, proved them right by admitting it in public. He stated that he didn’t want to give USPS money because it would enable them to deliver mail ballots more efficiently. Trump is a malicious, authoritarian jerk; I’m not denying that. But Trump says a lot of stupid things, like Mexico will pay for walls and COVID-19 will be over in a month. And he technically has no control over DeJoy; only the Board of Governors does.

The $25 billion under negotiation for the post office isn’t actually for mail ballots, but for forgone revenues due to COVID-19. And mail ballots will still get delivered through November. Multiple election experts, including Secretaries of State like Minnesota’s Steve Simon state that they believe USPS will be able to handle the volume of election mail this year, despite the increased amount and COVID-19. As Kevin Kosar argues, “USPS delivers 2.8 billion mail pieces per week. Even if 275 million individuals cast ballots by mail the USPS could handle it.” (Currently, approximately 209 million individuals could theoretically do so, so Kosar is being generous.)

Postal Service spokesman David Partenheimer told FactCheck.org in late June that “the current financial condition is not going to impact [USPS’s] ability to deliver election and political mail this year.” And DeJoy made a similar statement to the Board of Governors earlier this month:

[L]et me be clear that with regard to Election Mail, the Postal Service and I are fully committed to fulfilling our role in the electoral process. If public policy makers choose to utilize the mail as a part of their election system, we will do everything we can to deliver Election Mail in a timely manner consistent with our operational standards. We do ask election officials and voters to be mindful of the time that it takes for us to deliver ballots, whether it is a blank ballot going to a voter or a completed ballot going back to election officials. We have delivery standards that have been in place for many years. These standards have not changed, and despite any assertions to the contrary, we are not slowing down Election Mail or any other mail. Instead, we continue to employ a robust and proven process to ensure proper handling of all Election Mail.

So mail is not being intentionally slowed. Rather, the USPS now has a Postmaster General who is very serious about making cost-efficiency savings, and is in an environment where it has to do it as soon as possible. It’s a perfect storm. There are changes happening to our postal system because it’s been needed for a long time, and USPS cannot wait any longer to make cost-saving changes without becoming insolvent within a year. USPS has needed reforms, and several have been contemplated. The Government Accountability Office noted in 2017 that no cost savings initiatives had been planned, but were likely necessary to ensure financial sustainability of USPS.

Good, fast, cheap. Choose two.

But without legislative action to save USPS, and with no chance of increasing revenues enough due to COVID-19, DeJoy’s only choice is to cut costs. And DeJoy’s other actions match that his intentions are only to do what he can to save USPS, not anything malicious. For example, in July he issued a statement that USPS would need to better adhere to its operations plans to keep costs low, and he asked Congress for legislative relief. Last week, he restructured the organization to be more efficient, and has made an additional public statement on the need for Congress to “enact reform legislation that addresses our unaffordable payments” to the RHBF. Just yesterday DeJoy issued a temporary price increase on non-retail commercial packages in order to increase revenue.

Maybe this all is a pretext hiding a massive conspiracy that managed to fool the two democratic Governors of USPS. That seems unlikely though. It seems more likely to me that we have a president who shoots off his mouth and a logistics expert in charge of a postal agency in financial crisis.

USPS is an essential public service. It should not have to fund itself or earn a profit. Congress should fund it instead.

This is an opinion, not a fact check, but since you brought it up: Yes and No.

Let’s assume that USPS is an essential public service. This is a relatively safe assumption since Americans think it’s the most important role in our current COVID-19 world. 91% of Democrats and 91% of Republicans favorably view the agency. And USPS is heavily relied upon by business, including Amazon, UPS, and Fed Ex, to carry their package the last mile to residences and rural businesses that aren’t served by other parcel carriers.

Should Congress fund it? I think that’s a double edged sword. I think it’s smart to keep such a crucial, independent agency sufficient with its own funding. I would hate to see USPS slowed or shut down due to severe budget cuts or a government shutdown. On the other hand, one time emergency funding wouldn’t be a bad idea.

Regardless, DeJoy doesn’t have control over that. His job is to balance the budget. Only Congress can decide whether and how to provide USPS any funding.

Long Story Short: What if Postmaster General Louis DeJoy is the good guy?

What’s happening is likely innocent but controversial actions happening at a very bad time. It is possible that some people, like President Trump, have malicious intentions. But so far, DeJoy only appears to only be executing plans that have long been recommended and responding to a budgetary crisis exacerbated by COVID-19.

Because if he doesn’t take action now, it substantially increases the likelihood that our future elections will be compromised and that we stop receiving important mailed items like stimulus checks, tax refunds, medicines, and more.

A lack of communication and understanding by the public, combined with a volatile political atmosphere, has made people panic that there is some kind of authoritarian seizure happening. We should be worried about the financial future of USPS, but not panicking as if there is an imminent crisis.

There are many, many, many things to be worried about right now. Don’t burn yourself out by panicking over this. Keep your fire lit for another fight.

The House Oversight Committee has announced that it will hold a hearing on mail delays on August 24. It has invited Postmaster General DeJoy to testify, as well as the Chair of the Board of Governors. I hope that people’s questions get answered. Additionally, the House plans to take a vote on the Delivering for America Act.

What you can actually do to help

1. Ask your Senator to provide short-term emergency funding, as well as long-term solutions to ensure USPS’s financial stability. A one-time appropriation is not enough. Some examples of how to do this includes some ideas from this opinion article. Many people are supporting H.R.2382, the USPS Fairness Act, which the House has already passed. But as explained above, this Act would not solve all of USPS’s financial woes. Additional financial issues would still need to be addressed, either by continuing cost-efficiency changes or through additional sources of revenues, like Congressional funding. You may also wish to express support for the Delivering for America Act, though that Act will not provide any funding to USPS (emergency or sustaining).

2. Do not let the Senate say “no” to emergency funding for USPS.

3. Also ask your U.S. Representative and Senator, as well as President Trump, to ask the Postmaster General to pause any further efficiency changes until after the November election. Also ask that Postmaster General DeJoy be fully transparent about what changes will happen when and the rationale behind each change. Communication with elected officials, election officials, and the public should be frequent.

4. If you encounter significant postal service interruptions (e.g., more delay than just a day or so), contact your local post office. If they are unresponsive, contact state and federal legislators to let them know you’re worried. State legislators have no power over USPS, but might be good conduits to help you be heard by federal legislators. Also consider contacting your local press.

5. Request your absentee ballot ASAP and return it at least ten days before Election Day, preferably sooner if you can. Learn about mail voting in your state and important dates.

6. If you are willing and able, become a poll worker. Election officials are going through a crisis due to a lack of poll workers. In the past, poll workers often have been older and retired Americans, who now are unable or unwilling to be poll workers due to risks associated with COVID-19.

7. If you’re still worried about your absentee ballot not arriving in time to be counted this fall, you can also drop it off in person. The location varies, but it’s usually with a city or county official. Contact your local elections office to check where to hand deliver it. If you don’t know your local elections office, contact your state elections office for help. However, if many voters return their ballot this way in the last week before the election, there likely will be large numbers of people consolidated and traveling through local election offices, defeating the purpose of using mail voting to avoid the spread of COVID-19. I encourage folks to watch how things develop over the next few weeks to see if their confidence in USPS is restored.

Thank you to Kevin Kosar for his tweets sharing his perspective on the situation and willingness to help point me to sources providing much of the information and context in this post.

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"Stop Panicking About The Post Office!"