U.S. Postal Service on ‘death spiral’ without urgent reform: chief

By David Shepardson

WASHINGTON (Reuters) – U.S. Postmaster General Louis DeJoy told lawmakers that U.S. mail system is losing $10 billion a year and urgently needs reform and legislative relief from Congress.

“I would suggest that we are on a death spiral,” DeJoy told the U.S. House Oversight and Government Reform committee at a hearing Wednesday, who did not rule out changing first-class delivery standards or other significant changes.

DeJoy, a supporter of former President Donald Trump appointed to head the Postal Service last year, suspended operational changes in August after heavy criticism over postal delays. He plans to release a new 10-year strategic “break-even” plan soon.

Delays in paychecks and other mail deliveries by the Postal Service, or USPS, gained attention this summer as a record number of voters mailed in ballots to elect a new president.

House Oversight and Government Reform Committee Chairwoman Carolyn Maloney made the case for action as the USPS faces shrinking volumes of first-class mail, increased costs of employee compensation and benefits, and higher unfunded liabilities and debt.

New Postal Board chairman Ron Bloom, who said that the USPS is currently projected to lose $160 billion over the next decade, told lawmakers “we can’t just throw money at the problem. We must address the systemic issues plaguing its outdated model.”

The USPS reported net losses of $86.7 billion from 2007 through 2020. One reason is 2006 legislation mandating that it pre-fund more than $120 billion in retiree health care and pension liabilities, a requirement labor unions have called an unfair burden not shared by other businesses.

Maloney has circulated draft legislation on some USPS financial issues, such as eliminating a requirement to pre-fund retiree health benefits and require postal employees to enroll in government-retiree health plan Medicare, for a saving of $40 to $50 billion over 10 years. “The Postal Service is facing a dire financial situation that requires us to act,” she said.

DeJoy said the reform bill alone “doesn’t solve the problem.” He also rebuffed calls from some Democrats to step down vowing that he will stay “a long time. Get used to it.”

Bloom said the USPS will ask the Biden administration to calculate pension obligations “using modern actuarial principles” that would save another $12 billion.

Mark Dimondstein, president of the American Postal Workers Union, urged Congress to award the USPS an additional $15 billion and called for a separate “modernization grant” of $25 billion.

In December, Congress converted a $10 billion U.S. Treasury loan to the USPS into a grant.

Some Democrats want President Joe Biden to fire the current postal board. There are three vacancies on the board that the White House has promised to soon fill.

(Reporting by David Shepardson; Editing by Clarence Fernandez, Aurora Ellis and Jonathan Oatis)

Congress to weigh reforms to U.S. Postal Service over finance woes

By David Shepardson

WASHINGTON (Reuters) – A panel of the U.S. House of Representatives will hear testimony on Wednesday from Postmaster General Louis DeJoy and other officials as lawmakers consider significant reforms to tackle the precarious finances of the U.S. Postal Service (USPS).

Delays in paychecks and other mail deliveries by USPS gained attention this summer as a record number of voters mailed in ballots to elect a new president.

DeJoy, a supporter of former President Donald Trump appointed to head the USPS last year, suspended operational changes in August after enormous criticism over postal delays. He plans to release a new 10-year strategic plan soon.

House Oversight and Government Reform chairwoman Carolyn Maloney will make the case for action on the finances of the USPS in the face of shrinking volumes of first-class mail, increased costs of employee compensation and benefits, and higher unfunded liabilities and debt.

“We need to pass meaningful reforms — and hopefully bipartisan reforms — to put the Postal Service on more sustainable financial footing for years to come,” Maloney will say, according to excerpts from her office.

USPS reported net losses of $86.7 billion from 2007 through 2020. One reason is 2006 legislation that it pre-fund more than $120 billion in retiree health care and pension liabilities, a requirement labor unions have called an unfair burden not shared by other businesses.

Maloney has circulated draft legislation on some USPS financial issues, such as eliminating a requirement to pre-fund retiree health benefits.

It would also require postal employees to enroll in government-retiree health plan Medicare, for a saving of roughly $10 billion over ten years.

Mark Dimondstein, president of the American Postal Workers Union, will urge Congress to include an additional $15 billion “to help stabilize the Postal Service during this crisis” in a COVID-19 relief package.

His testimony, seen by Reuters, calls for another USPS “modernization grant” of $25 billion to make “long overdue” investments in a clean postal fleet, modernizing postal facilities and providing electric vehicle charging stations for local post offices.

Also testifying is Joel Quadracci, chief executive of printing company Quad/Graphics.

DeJoy will testify alongside Ron Bloom, a former Obama administration official elected this month as the new chairman of the U.S. Postal Board of Governors.

In December, Congress converted into a grant a $10 billion U.S. Treasury loan that lawmakers gave to USPS in March.

(Reporting by David Shepardson; Editing by Clarence Fernandez)

U.S. judge orders Post Office to expedite November election mail

By David Shepardson and Joseph Ax

WASHINGTON/NEW YORK (Reuters) – A federal judge on Monday ordered the U.S. Postal Service to expedite all November election mail and to approve additional overtime for postal workers.

U.S. District Judge Victor Marrero in Manhattan said the Postal Service must treat to the extent possible all election mail as first-class mail or priority mail express and “shall pre-approve all overtime that has been or will be requested” between Oct. 26 and Nov. 6.

Marrero’s opinion said that in prior elections, including 2018, the Postal Service typically treated election mail as first-class mail, even if it was sent at marketing mail rates.

“Multiple managerial failures have undermined the postal employees’ ability to fulfill their vital mission,” he wrote.

Last week, U.S. District Judge Stanley Bastian in Yakima, Washington, said he was issuing a nationwide injunction sought by 14 states in a case against President Donald Trump, Postmaster General Louis DeJoy, and the U.S. Postal Service over July changes to the service.

The 14 states, led by Washington, had filed a motion for a preliminary injunction asking the court to immediately halt a “leave mail behind” policy that required postal trucks to leave at certain times, regardless of whether mail was loaded.

DeJoy, a Trump supporter, said in August that he would halt many of the cost-cutting changes he put in place until after the presidential election after Democrats accused him of trying to put his thumb on the scales to help Trump, which he has denied. A surge in mail-in ballots is expected because of the coronavirus pandemic.

U.S. Postal Service spokesman Dave Partenheimer said last week while the agency was exploring its legal options, it was “ready and committed to handle whatever volume of election mail it receives.”

“Our number one priority is to deliver election mail on time,” Partenheimer said.

(Reporting by David Shepardson; editing by Jonathan Oatis)

U.S. House panel to subpoena DeJoy seeking Postal Service documents

By David Shepardson

WASHINGTON (Reuters) – The chairwoman of the House Oversight and Reform Committee said Monday she plans to subpoena Postmaster General Louis DeJoy seeking documents he has been withholding from Congress.

Representative Carolyn Maloney, a Democrat, said DeJoy has not turned over any additional documents after a hearing last week on the Postal Service. DeJoy told lawmakers last week he planned to resume some cost-cutting measures that have factored in widespread service delays after the November election, defying Democratic lawmakers who have sought to block his changes.

Maloney also sent a document request Monday to Postal Service Board of Governors Chairman Robert Duncan.

A Postal Service spokesman did not immediately comment, but DeJoy said in a letter to the committee that staff are “working with the Oversight committee to identify and provide materials requested during the hearing.”

DeJoy also said last week he would keep in place a management reshuffle he implemented after assuming his job in June.

DeJoy has sought to assure Americans that widespread delays caused by his cost-cutting efforts would not cause their ballots to go uncounted in November’s election, when up to half of U.S. voters could cast ballots through the mail.

DeJoy, who has donated $2.7 million to President Donald Trump and other Republicans since 2016, has rejected charges of political interference. Trump has claimed, without evidence, that absentee voting is unreliable, even though he has voted that way himself.

DeJoy has refused to bring back mail-sorting machines and mailboxes pulled from service in recent weeks, saying they were routine responses to changes in mail volume that were under way before he took office.

The House this month voted to prevent DeJoy from taking action that would impede service until January, and also to provide $25 billion in funding. That legislation is not expected to advance in the Republican-controlled Senate and the White House has threatened to veto it.

(Reporting by David Shepardson; Editing by Cynthia Osterman)

U.S. postmaster tells House committee he will resume cost-cutting after election

By Andy Sullivan

WASHINGTON (Reuters) – U.S. Postmaster Louis DeJoy told lawmakers on Monday that he planned to resume some cost-cutting measures that have factored in widespread service delays, defying Democratic lawmakers who have sought to block his changes.

DeJoy told lawmakers that he will push to improve on-time deliveries after the Nov. 3 election, an effort that he suspended last week after a public backlash. He also said he would keep in place a management reshuffle he implemented after assuming his job in June.

“These two changes, creating our new on-time transportation network and designing an engaged functional organizational structure, will be the catalyst for the significant improvements in cost, performance and growth,” DeJoy told the House of Representatives Oversight Committee.

DeJoy has sought to assure Americans that widespread delays caused by his cost-cutting efforts would not cause their ballots to go uncounted in November, when up to half of U.S. voters could cast their ballots through the mail.

DeJoy, who has donated $2.7 million to President Donald Trump and other Republicans since 2016, has rejected charges of political interference. Trump has claimed, without evidence, that absentee voting is unreliable, even though he has voted that way himself.

DeJoy’s push to improve on-time deliveries forced trucks to leave sorting facilities even if mail was still on the loading dock, postal workers say, leading to widespread delays nationwide.

Postal Service documents released by Democrats show an 8% slowdown in first-class mail, largely occurring after he became postmaster in June.

“Whatever the cause of these massive delays, the American people want to go back to the way things were,” Committee Chair Carolyn Maloney said.

DeJoy has refused to bring back mail-sorting machines and mailboxes pulled from service in recent weeks, saying they were routine responses to changes in mail volume that were underway before he took office.

He said he was not responsible for some other service changes, such as reduced retail hours and overtime for Postal Service workers.

The White House has declined to say whether Trump will respect the results of the election if he loses.

Dozens of Democrats have called for DeJoy to be fired.

The House on Saturday voted to prevent DeJoy from taking action that would impede service until January, and also to provide $25 billion in funding. That legislation is not expected to advance in the Republican-controlled Senate and the White House has threatened to veto it. The Postal Service also opposes that legislation.

(Reporting by Andy Sullivan; Editing by Dan Grebler)

U.S. House votes to block Postal reforms seen as threat to mail-in ballots

By David Morgan

WASHINGTON (Reuters) – The Democratic-led U.S. House of Representatives voted on Saturday to provide the cash-strapped Postal Service with $25 billion and block policy changes that have stirred concerns about mail-in balloting ahead of the Nov. 3 election.

The 257-150 vote sent the legislation dubbed the “Delivering for America Act” on to the Republican-controlled Senate. But Senate Majority Leader Mitch McConnell said in a statement that the Senate would “absolutely not pass” the stand-alone bill.

The White House also strongly opposes the legislation and has said it would recommend that President Donald Trump veto the measure.

But more than two-dozen House Republicans broke ranks to join Democrats in approving the bill, during a rare Saturday session called by House Speaker Nancy Pelosi in the middle of the congressional August recess.

With mail-in voting expected to surge during the coronavirus pandemic, Trump has alarmed Democrats by repeatedly denouncing mail-in ballots as a possible source of fraud. Postmaster General Louis DeJoy recently suspended cost-cutting measures that have slowed deliveries in recent weeks.

Democrats, who accuse Trump of trying to discourage mail-in balloting to gain an electoral advantage over Democratic presidential nominee Joe Biden, cast themselves as defenders of a public that relies on the Postal Service for vital deliveries, including prescription drugs.

“The American people do not want anyone messing with the Post Office. They certainly do not want it to be politicized. They just want their mail, they want their medicines and they want their mail-in ballots delivered in a timely way. And that is exactly what our bill does,” said Democratic Representative Carolyn Maloney, who authored the legislation.

Maloney also released a Postal Service document showing an 8% slowdown in the processing of first class mail, most of it occurring after DeJoy became postmaster in June.

Republican leaders denied that the Postal Service was in any danger and criticized Democrats for moving legislation forward before DeJoy could testify at a House hearing slated for Monday.

“This is the result of a legislative process only slightly less absurd than the conspiracies, insinuations and fabrications that gave rise to the purported need for it,” said Republican Representative James Comer.

The 26 Republicans who supported the measure represented more than one in 10 House Republican members. Another 23 Republicans did not vote.

As lawmakers prepared to vote, Trump took to Twitter to accuse Pelosi and Senate Democratic leader Chuck Schumer of seeking unnecessary funding for the Postal Service and trying to pull off a “Universal Mail-In Ballot Scam.”

“Vote NO to the Pelosi/Schumer money wasting HOAX which is taking place now,” the president wrote.

DeJoy told a Senate committee on Friday that the Postal Service would deliver ballots “securely and on time” in the November election but said bigger changes could come after that.

In fact, the House bill would prevent DeJoy from taking any action that would impede service until after next January or the end of the coronavirus health emergency, whichever comes later.

“Our legislation is not just about the election. It’s about – surprise, surprise, Mr. Postmaster General – the coronavirus!” Pelosi told a news conference.

Pelosi insisted that congressional action is necessary, calling DeJoy’s assurances ambiguous and unsatisfactory. “His comments are one thing. His actions will be another. And that’s why we have this legislation,” she said.

She said Trump’s attacks on mail-in voting were part of a larger effort to suppress voting that also includes his recent call for law enforcement officers to monitor voting at polling places.

(Reporting by David Morgan; Additional reporting by Jan Wolfe; Editing by Andy Sullivan, Alistair Bell, Aurora Ellis and Daniel Wallis)

U.S. House to vote on $25 billion postal infusion, mail-in ballot safeguards

By David Shepardson and David Morgan

WASHINGTON (Reuters) – U.S. House of Representatives Democrats unveiled on Wednesday legislation that would require same-day processing for mail-in ballots and give the cash-strapped Postal Service a $25 billion infusion while erasing changes pursued by the agency’s new leader, an ally of President Donald Trump.

The Democratic-led House is scheduled to vote on the legislation on Saturday, though there is little chance for passage in the Republican-led Senate. The bill would prevent the Postal Service from implementing policies to alter service levels that were in effect at the beginning of this year.

Democrats and other critics have accused the Republican president of trying to impair the Postal Service to suppress mail-in voting as he trails Democratic challenger Joe Biden in opinion polls ahead of the Nov. 3 election.

Under intense criticism, Postmaster General Louis DeJoy announced on Tuesday that he would put on hold until after the election cost-cutting moves at the Postal Service that Democratic lawmakers and state attorneys general argued could imperil mail-in voting. DeJoy said he suspended all “operational initiatives” through Election Day to “avoid even the appearance of any impact on election mail.”

DeJoy, who has been a major political donor to Trump, assumed the job in June.

The Postal Service long has faced financial woes with the rise of email and social media, losing $80 billion since 2007, including $2.2 billion in the three months ending June 30.

Democrats want DeJoy to explain how he will reverse the changes he has made, including whether he will order the return of sorting machines already removed.

Separately, Senator Chuck Schumer, the top Senate Democrat, asked the Postal Service Board of Governors to release all materials related to the selection of DeJoy and for “additional information” regarding the role of Trump and Treasury Secretary Mnuchin in the search and selection process.

The board in May said it reviewed records of more than 200 candidates before narrowing the list to more than 50. The board then interviewed more than a dozen candidates in first round interviews, and invited seven candidates for follow-up interviews.

Trump has repeatedly and without evidence claimed that mail balloting is vulnerable to fraud. Voting by mail is nothing new in the United States, and Trump himself plans to vote by mail in Florida this year.

White House Chief of Staff Mark Meadows said the White House was not involved in the Postal Service changes. The Treasury Department and the Postal Service did not immediately respond to requests for comment.

(Reporting by David Morgan, Susan Cornwell and David Shepardson; Editing by Will Dunham)

New U.S. Postal Service chief warns of ‘dire’ finances as quarterly loss narrows

By David Shepardson

WASHINGTON (Reuters) – The head of the U.S. Postal Service (USPS) on Friday said the agency faces a “dire” financial position even as it posted a slightly narrower third-quarter loss amid soaring package demand during the coronavirus pandemic.

Postmaster General Louis DeJoy said USPS has a “broken business model” and is in need of organizational changes. “Without dramatic change, there is no end in sight and we face an impending liquidity crisis,” DeJoy said.

USPS said quarterly revenue rose to $17.6 billion, up $547 million. The quarterly net loss shrank to $2.2 billion from $2.3 billion in the same quarter last year.

First-class mail volume declined by 1.1 billion pieces, or 8.4%. Shipping and packages revenue increased by $2.9 billion, or 53.6%, on a volume increase of 708 million pieces, up 49.9%.

Democrats Thursday called on DeJoy to reverse changes that they say are resulting in delayed mail.

“We believe these changes, made during the middle of a once-in-a-century pandemic, now threaten the timely delivery of mail—including medicines for seniors, paychecks for workers, and absentee ballots for voters—that is essential to millions of Americans,” wrote House Speaker Nancy Pelosi and Senate Democratic Leader Chuck Schumer.

Voting by mail is expected to increase dramatically this fall amid the coronavirus pandemic. Trump has claimed without evidence that absentee voting leads to rampant fraud.

“We are not slowing down election mail or any other mail,” DeJoy, a Trump supporter, said Friday.

The Postal Service has faced financial woes with the rise of email and social media, and a measure passed in 2006 requiring it to pre-fund 75 years of retiree health benefits over the span of 10 years at a cost of more than $100 billion.

DeJoy said the Postal Service is eliminating inefficiencies, including “unnecessary overtime.” The Postal Service has lost $80 billion since 2007.

(Reporting by David Shepardson; Editing by Nick Zieminski)