Postal service

Biden progressive stiff arms on the Postal Service

President Biden has sent a clear message to progressives regarding the United States Postal Service (USPS): Major change is complete and Trump fundraiser Louis DeJoy can stay on as Postmaster General for the next few years. He will lead 21 percent of the federal civilian workforce.

The president did this by naming two very impressive and accomplished public servants – Dan Tangherlini and Derek Kan – to serve on the Board of Governors of the USPS, i.e. its Board of Trustees.

The Board of Governors, not President Biden, has the power to fire and hire the postmaster general. So while the senses. Bernie Sanders (I-Vt.), Elizabeth Warren (D-Mass.), Tammy Baldwin (D-Wis.) And dozens of members of Congress have demanded that DeJoy be firedit stays in place.

With the probable confirmation of Tangerlini and Can, Biden will have five board nominees to President Trump’s four. But Kan is a Republican who has worked in the Trump administration and for Sen. Mitch McConnell (R-Ky.), which makes him unlikely to remove DeJoy. And at least two of Biden’s other confirmed nominees have showed no inclination to remove DeJoy.

By right, no more than five of the nine governors with the power to dismiss a postmaster general may belong to the same political party. The board’s broad functions, which include directing and controlling expenditures and setting policy on all postal matters, make the job ill-suited to single-order political hacks.

For these and other reasons, Biden’s picks are practical and appropriate. And for progressives, the DeJoy nightmare could soon get worse.

There was visible consternation among House Democrats as DeJoy refused to purchase a large quantity of electric vehicles to replace the USPS fleet, even though the USPS has more than $20 billion in liquid. DeJoy played the Democrats like a fiddle, promising more electric vehicles, but only if the funds are provided by Congress, which many Democrats are determined to do.

Congress is considering the Postal Service Reform Act (PSRA), the core of which will provide $46 billion in financial assistance to the USPS. Passing the legislation is a key part of DeJoy’s 10-year plan, which also includes slowing first-class mail by 40% and expanding business parcel delivery.

The legislation will give DeJoy vast resources to work with. It would come on top of a $10 billion COVID grant the USPS received as part of the December 2020 COVID package, even though its revenue has increased significantly during the pandemic. And the USPS’ work to distribute COVID test kits will also provide additional cash.

While DeJoy, a successful private sector logistics executive, was a major fundraiser and donor for Donald Trump and the Republican Party, his policies as postmaster general were rarely conservative.

The Republicans took big problem with DeJoy when it set up an experimental postal banking program in October 2021.

DeJoy’s PSRA push follows Democrats holding a saturday special session of Congress on August 22, 2020, demanding $25 billion in aid from the USPS while warning that the election may not go smoothly due to disruptions in mail-in voting. The measure passed the House but was not signed into law, and the USPS still delivered election mail in a pattern.

Under DeJoy’s leadership, the USPS recently achieved a three-year employment contract with the American Postal Workers Union which includes wage increases above inflation for the next three years. No wonder APWU President Mark Dimondstein said, “This is great news. And with raging inflation, those increases and the costs to USPS and its customers will likely be high.

As before DeJoy took office in June 2020, the USPS continues to underpay its large customers. In his Annual compliance reportreleased Dec. 29, USPS reports that parcels were again significantly less profitable than first-class or marketing mail.

Additionally, USPS-determined packages accounted for 39% of institutional costs, even though they accounted for 44% of revenue. Yet parcels are larger and more expensive to deliver than mail. Last year, USPS also made nearly all of its significant capital investments in package services.

A key step to fix USPS in the long run is to better identify and track product costs and prices accordingly, through modern, state-of-the-art data analytics and related systems. That’s more than slowing down 40% of first-class mail, especially to rural America.

On its current course, the USPS will likely ask Congress for more money again in the coming years, even with the passage of the Postal Service Reform Act. And chances are Louis DeJoy will still be Postmaster General.

Paul Steidler is a senior researcher at Lexington Institutea public policy think tank based in Arlington, Virginia.