The White House is making its move to "save" the US Postal Service by amputating its limbs for a infected, festering wound that Republicans inflicted on it a decade ago.
The Treasury Department is considering taking unprecedented control over key operations of the U.S. Postal Service by imposing tough terms on an emergency coronavirus loan from Congress, which would fulfill President Trump’s longtime goal of changing how the service does business, according to two people familiar with the matter.
Officials working under Treasury Secretary Steven Mnuchin, who must approve the $10 billion loan, have told senior officials at the USPS in recent weeks that he could use the loan as leverage to give the administration influence over how much the agency charges for delivering packages and how it manages its finances, according to the two people, who spoke on the condition of anonymity because the talks are preliminary.
Trump has railed for years against what he sees as mismanagement at the Postal Service, which he argues has been exploited by e-commerce sites such as Amazon, and has sought to change how much the agency charges for the delivery of packages. (Amazon’s founder and chief executive Jeff Bezos owns The Washington Post.)
Under the $2 trillion coronavirus stimulus relief passed last month, the Treasury was authorized to loan $10 billion to the USPS, which says it may not be able to make payroll and continue mail service uninterrupted past September. Mnuchin rejected a bipartisan Senate proposal to give the Postal Service a bailout amid the negotiations over that legislation, a senior Trump administration official and a congressional official previously told The Post.
The borrowing terms have only been discussed among both agencies’ leadership and have not been made public because the Postal Service hasn’t officially requested the loan, the two people familiar with the matter said. Mnuchin could still decide not to pursue tough terms as the September deadline nears. The Postal Service would not have to use the entire $10 billion loan at one time, but could borrow up to that amount at any given time.
In discussions with senior USPS personnel, Treasury officials have said they are interested in raising rates on the Postal Service’s lucrative package business, its sole area of profitability in recent years. Treasury also could review all large postal contracts with package companies to push for greater margins on deliveries.
Treasury officials have said they may press the agency to demand tougher concessions from its powerful postal unions — among the public-sector unions that still retain significant leverage in negotiations with the government.
The officials have also said Mnuchin wants the authority to review hiring decisions at the agency’s senior levels, including the selection of the next postmaster general, a decision that until now has been left to the Postal Service’s five-member board of governors.
USPS spokesman David Partenheimer confirmed in an email that the agency and Treasury have begun “preliminary discussions” over the loan, but that the Treasury had not yet asked “to impose any of those conditions on that borrowing authority.” He declined to say whether these or any other terms were under discussion.
In 2006, Republicans rammed through the Postal Accountability and Enhacement Act, which mandated that unlike any other US corporation, the US Post Office was required to pre-fund all employee retiree benefits for 50 years.
The law requires the Postal Service, which receives no taxpayer subsidies, to prefund its retirees’ health benefits up to the year 2056. This is a $5 billion per year cost; it is a requirement that no other entity, private or public, has to make. If that doesn’t meet the definition of insanity, I don’t know what does. Without this obligation, the Post Office actually turns a profit. Some have called this a “manufactured crisis.” It’s also significant that lots of companies benefit from a burden that makes the USPS less competitive; these same companies might also would benefit from full USPS privatization, a goal that has been pushed by several conservative think tanks for years.
Trump's plan is Hostage-Taking 101: either the House and Senate pass legislation to put the USPS under the control of the Treasury Department, or Trump stands by and watches the postal system fail. The collapse of the postal service would hurt Trump's voters the most, but so did Chinese and EU tariffs and they still love him for it.
We'll see very quickly if Trump is this deranged, and betting against "Trump being willing to go this far" never ends well.