There are many reasons to be concerned about the agency’s funding, but some of the reaction is misplaced. 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 — that the United States Postal Service is in imminent danger and the Trump administration may undermine mail-in voting for the upcoming election. 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 USPS. People around the country have encountered a notable slowdown in mail service, and some USPS workers have raised alarms about new policies that affected mail delivery. But the whole sky isn’t falling quite yet.
There have been many developments over the last few days. The House Oversight Committee has announced it will hold a hearing on mail delays on August 24. It has invited Postmaster General Louis DeJoy to testify as well as the agency’s chair of the Board of Governors. DeJoy has agreed to appear, and on Tuesday, he followed up by promising to suspend his controversial changes to the mail service until after the election “to avoid even the appearance of any impact on election mail.”
So, stop panicking! Being concerned and taking specific, practical action is good; overreacting on social media is bad.
Let’s fact-check some claims, shall we? I know this is long, but please stay with me.
Verdict: True about the distress; insolvency is off by 10 months.
The 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, and magazines) has declined steadily for over two decades. The costs for shipping letters and flats, however, have not declined as much. Less revenue with the same costs has resulted in the USPS taking financial losses.
Covid-19 has exacerbated these issues even further. Mail volume dropped while expenses, like for personal protective equipment (PPE), increased — so much so that the USPS sought $50 billion in emergency funding and the authority to borrow another $25 billion from the Treasury. This was considered for the CARES Act, which addresses many other Covid-19-induced financial crises. The USPS estimated in the spring that it would have an estimated $13 billion budget shortfall (compared to a $9 billion shortfall in fiscal year 2019).
But we now know that the USPS will survive at least a little longer. While its 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 late July.
In its fiscal quarter report filed June 30, the USPS indicated that it has “sufficient liquidity to continue operating through at least August 2021.”
So the USPS is in a critical condition, but it does not appear that it will shut down before the November election.
Mostly true, but that’s not the only reason.
This is a pervasive half-truth. The Postal Accountability and Enhancement Act of 2006 required the 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, the USPS was supposed to pay $5 billion–$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 the USPS does go into crisis.
The problem is that the USPS hasn’t been paying into the fund since 2012 and didn’t even make full payments 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 the USPS’s financial survival.
But despite the dire situation surrounding the RHBF, the payments are not the sole cause of the 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 Donald Trump — can help us uncover the truth.
USPS revenue and expenditures table, fiscal year 2010 through fiscal year 2018 Source: Task Force on the United States Postal System/Department of the Treasury
The third row of the table demonstrates what the USPS’s net income or loss would have been without the RHBF. The USPS would have only reported losses in 2010–2012 but would not have lost money through 2018. Payments for the RHBF have stopped, but the USPS is still accruing new costs of $3 billion–$4 billion per year. On the other hand, the 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, the USPS would have still had losses for 2010, 2011, 2012, 2019, and 2020 — five of the last 10 years.
This means that while a significant portion of the financial trouble can be attributed to the retirement benefits, the 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.
False.
Several people seem to be under the belief that the Constitution mandates the existence or funding of the USPS. 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 USPS. And Congress has.
False.
The USPS is an independent agency that has been almost exclusively self-funded since 1971. It may receive some small appropriations for “public service costs” and “revenue forgone.”
The law states that 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.” The USPS may request an appropriation for public service costs for up to $460 million annually. However, the USPS has not requested or received this reimbursement since 1982.
Revenue forgone is funding provided to subsidize the mailing costs of groups such as blind people and overseas absentee voters. Under the Revenue Forgone Reform Act of 1993, the 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, the 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 revenue even if the agency did receive the payments.
But the USPS has asked this year for an emergency appropriation from Congress. Politico reports that the House plans to take a vote on the Delivering for America Act, which would restore the USPS to service standards prior to DeJoy’s taking office, provide emergency funding, and address mail sorting machines. House Republicans, however, are reportedly planning to whip votes to block the bill. The House has already passed the USPS Fairness Act, which would remove the burdens with retiree benefits, and has advocated for emergency funding for the USPS.
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 the 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 the 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 the 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.
Instead, consider asking your U.S. representative and senators to provide short-term emergency funding as well as long-term solutions to ensure the USPS’s financial stability. A one-time appropriation is not enough.
True.
Louis DeJoy is a large donor to Republicans and Trump. Prior to joining the USPS, DeJoy was the deputy finance chair for the Republican National Committee alongside Michael Cohen. Trump is not the first president to put a large donor in a key position, and to DeJoy’s credit, he does have a long career in logistics and operations. But it is also worth noting DeJoy is the first postmaster general in two decades who has not risen through the ranks of the USPS in some other capacity before being appointed to the position.
False in theory, but the final decision fell on Trump appointees.
The postmaster general is selected by the Board of Governors. The Board of Governors is appointed by the president with the advice and consent of the senate. No more than five of the nine governors may be from the same party. There are currently multiple vacancies on the board.
Trump appointed all six governors currently sitting on the board; the Republican-led Senate confirmed them all. There were only four governors at the time DeJoy was appointed in May; three were Republican, and one was a Democrat. They unanimously selected DeJoy as postmaster general, and he transitioned into his position in June. An additional Democrat and a Republican have each been appointed to the board since then.
Possibly. To be determined.
DeJoy and his wife own stock in companies that have a stake in the package delivery business. According to financial disclosures obtained by CNN, DeJoy holds $30 million in his former company, XPO Logistics, and he recently bought stock options on Amazon.
The 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 the USPS from having financial interests in companies that intersect with their official duties, which has been interpreted to include possession or transactions of stocks.
But Peter Schweizer, president of the conservative nonprofit 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 Government Accountability Institute is a mixed bag in terms of its accuracy, but I include this quote because even the very conservative Schweizer admits that it’s possible that DeJoy may be violating the law.)
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.
False.
This is in reference to the Saturday Night Massacre, when Richard 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 the USPS when he became postmaster general. But management shake-ups are not unusual when a new postmaster general takes over. In fact, the previous postmaster general, Megan Brennan, made her own leadership changes when she took the position in 2015 and again in January 2019.
USPS spokesman David Partenheimer told Vice that DeJoy’s changes only affected the organizational structure. “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,” he said.
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 the Saturday Night Massacre.
True.
Trump has repeatedly attacked the concept of having voters cast their ballots by mail in this upcoming election due to safety concerns around the pandemic. He’s called universal mail-in voting “catastrophic.” He’s accused Democrats of trying to “steal an election” by using vote-by-mail ballots and long claimed (without proof) that the election results would be fraudulent.
Several people, including Joe Biden, contend Trump wants to slow down mail delivery through DeJoy in order to rig the election. They say he is intentionally withholding additional funding for the USPS in order to preemptively sabotage mail-in voting for the general election.
Trump, being who he is, proved critics right by admitting it in public. He said he didn’t want to give the USPS money because it would enable them to deliver mail ballots more efficiently.
“They want three and a half billion dollars for something that’ll turn out to be fraudulent, that’s election money basically,” Trump said of the USPS during a phone interview last week with Fox Business. “They want three and a half billion dollars for the mail-in votes. Universal mail-in ballots. They want $25 billion, billion, for the post office. Now they need that money in order to make the post office work so it can take all of these millions and millions of ballots.”
He continued: “Now, in the meantime, they aren’t getting there. But if they don’t get those two items, that means you can’t have universal mail-in voting because they’re not equipped to have it.”
Since then, Trump has toned down his rhetoric, suggesting he wouldn’t block a new bill before Congress to help the USPS’ financial woes. It is still unclear whether the Senate will agree to any funding. On Monday, Trump said he’s “encouraged everyone to speed up the mail,” not slow it down.
Half true.
First, I want to be clear: I do not deny that there are service delays. The USPS has definitely been experiencing some problems with service lately. And below, I get into some specific allegations. And I do not deny that service delays can be very worrisome and possibly life-threatening for some individuals, including folks who rely on timely USPS deliveries for medicine. The point of this post isn’t to argue whether the service delays are good or bad (I think most people agree they’re bad) but to discuss when they started and why.
The USPS’s service woes cannot be entirely attributed to DeJoy and his policies. Many communities, for example, experienced significant delays and even some nondeliveries during their primary elections this year, long before DeJoy took his role. Issues have ranged from changing operations to avoid Covid-19 spread, workforce shortages due to 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.
The Washington Post obtained an internal document last month showing changes to delivery policies put in place by DeJoy that have slowed service since July. The new policy guidelines generally fall into a few categories:
Stay on schedule
No overtime
No errors
No duplicate work
Many folks are paying special attention to the directive that USPS employees must leave distribution centers on time — even if it means leaving some mail behind. “One aspect of these changes that may be difficult for employees is that — temporarily — we may see mail left behind, which is not typical,” the memo reads. “We will address root causes of these delays and adjust the very next day.”
The key word is “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.
True.
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. The 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: Thanks to the public outcry, the USPS paused removal and transfer of collection boxes until after the election. It realized it was 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-in voting. But there are costs associated with a low-use collection box, and there may come a time when the collection box becomes 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. Collection boxes are moved all the time to adjust to the ebb and flow of mail volume. Given the USPS’s financial crisis, it seems reasonable to believe that some of these changes were to increase efficiency.
That said, a local news station in Montana checked on which collection boxes had been removed. Despite the argument that these mail collection boxes were rarely used, the boxes were in high traffic areas: outside a grocery store, 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).
Additionally, photographs of collection boxes with red locking devices on them also appear to be misleading. Some collection boxes are regularly locked on weekends. The front sides are locked because they are vulnerable to fishing, but there are slots in the back that are still accessible to drop envelopes off. Here’s one resident who actually went to the physical location to record proof that the collection boxes still function.
True.
Yes, the 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.
The plan to reorganize and rightsize the sorting machines, Vice has the good sense to note, was 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 it gives extended deadlines, which implies that this plan had already been around for quite some time.
Other facts back the reasoning of the plan. The type of mail these machines sort is decreasing in volume, down more than 15% just this year compared to last year. In other words, as Vice put it, so-called delivery bar code sorters (DBCS) “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 the 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 the 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.
Since the controversy broke, CNN reports White House chief of staff Mark Meadows has promised to end the changes: “Sorting machines between now and Election Day will not be taken off line.”
True but possibly not in the way you think.
I think this one is mostly a miscommunication issue. The USPS has warned 46 states with letters about how it can handle election mail.
A primer on election mail: When local election officials send election mail, they have two options: use first class mail or use marketing mail. First class mail is more expensive but faster (two to five days), whereas marketing mail is cheaper but slower (three to 10 days). The USPS recommends that return envelopes given to voters for ballots be first class business reply mail, but other election mail like voter registration materials or the envelopes that send out the blank ballots might be marketing mail.
Apparently, the 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. (Sidebar: Elections are funded at the local level and chronically underfunded.)
But the USPS cannot do that anymore because it’s costly. And therefore, election mail will be treated as its paid category. The USPS recognizes that its policy changes may cause some service delays. This means state law may allow voters to request and return ballots by mail on timelines that wouldn’t actually meet the state law’s deadlines because the deadlines are not realistic in the context of the USPS’s practices.
For example, a voter might be able to request an absentee ballot to be sent to them the day before the election, but logistically, the ballot would not reach them and be returned in time. Minnesota is like this; under the law, the last day to request a ballot is the day before Election Day, but realistically there’s no way the ballot would reach a voter the very next day. The secretary of state advises voters, “Leave time for election officials to mail your ballot.” This wouldn’t be new information for many election officials, and many already warn their voters of this. But I think it makes sense that the USPS would address the issue if it knew it was experiencing service delays.
So, again, I see the letter from the USPS as an attempt to warn election officials and preserve the election rather than undermine it. If DeJoy had wanted to undermine the election, he simply could have chosen not to warn election officials at all.
This is a legitimate concern, but we’re a long way from seeing proof of an organized conspiracy that Trump and DeJoy are attempting to rig the election.
The $25 billion under negotiation for the post office isn’t actually for mail-in ballots but for foregone revenues due to Covid-19. And mail ballots will still get delivered through November. Some election experts and officials, including secretaries of state like Pennsylvania’s Kathy Boockvar, say they believe the USPS will be able to handle the volume of election mail this year despite the increased amount and Covid-19 repercussions. Kevin Kosar, who is a vice president at the Washington, D.C., think tank the R Street Institute, argues the agency is equipped to process the ballots. “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.)
However, some election experts are worried that if the delays get any worse, it will affect voters. Per The Atlantic:
“If carriers are being told that, at the end of your shift, you need to be back at the office even if you haven’t collected all the mail that day, there could be ballots in those mailboxes,” says Tammy Patrick, a senior adviser at the nonprofit Democracy Fund Voice and a former Obama appointee to the Commission on Election Administration, a panel created in 2013 to identify best practices in running elections. “If the truck drivers are being told, ‘You leave the post office to take that day’s mail to the processing plant at your scheduled time to leave, even if all the carriers aren’t back in yet with that day’s mail,’ that can have an impact.”
Partenheimer, the USPS spokesman, told FactCheck.org in late June that “the current financial condition is not going to impact [the 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:
Let 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 policymakers 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… These standards have not changed, and despite any assertions to the contrary, we are not slowing down Election Mail or any other mail.
So mail is not being intentionally slowed. Rather, the USPS now has a postmaster general who is enacting cost-efficiency savings and is in an environment where he 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 the USPS cannot wait any longer to make cost-saving changes without becoming insolvent within a year. The 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 the financial sustainability of the USPS.
But without legislative action to save the USPS, and with no chance of increasing enough revenue due to Covid-19, DeJoy’s only choice is to cut costs. For example, in July, he issued a statement that the 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 this week, DeJoy issued a temporary price increase on nonretail commercial packages in order to increase revenue.
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 the USPS but not panicking as if there were an imminent crisis. If anything, this should spur voters to request their absentee ballots ASAP and return them at least 10 days before Election Day and preferably sooner. It’s best to learn more about mail voting in your state and important dates. Some allow voters to drop off their ballots in person but not all. Some states, like Minnesota, even allow you to track your absentee ballot. PolitiFact has additional advice to ensure your ballot is counted.
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.