Trump Moves to Gut the Post Office

David Dayen

April 16, 2018
His war on Amazon expands to include the right-wing’s campaign to abolish America’s oldest—and still successful—public service.  Some may be inclined to think that Donald Trump’s executive order Thursday night establishing a task force to recommend reforms for the U.S. Postal Service reflects another salvo in the president’s war against Amazon. Trump’s attack on Amazon, a clear byproduct of Amazon CEO Jeff Bezos’s ownership of The Washington Post, included the suggestion that the online retailer was “ripping off the post office” by securing a special deal for the USPS to ship packages the last mile. By reviewing the finances of the post office, Trump’s task force could demand increases to that shipping contract, possibly costing Amazon billions of dollars.
Whether Amazon actually is getting a special deal on shipping is open to intense debate. The company also happens to enjoy a discount on stamps, which they then mark up to their own marketplace sellers, a pure arbitrage deal to earn profits from a publicly issued product.
But these issues have almost nothing to do with the Trump executive order. The Amazon spat is a cover for the formal unveiling of a long-wished right-wing project to destroy the post office and have private industry take over its infrastructure, which taxpayers funded long ago. All the executive order really does is create a report; it would take a willing Congress to deliver the final hammer blow. But that report, with a government imprimatur, will become part of that right-wing wish list, living on for decades in think tanks and private shipping company boardrooms as a fervent dream.
And sometimes dreams become reality.
Let’s look at the executive order, which is a bit deceptive in its intentions. The policy section manages to mention that the Postal Service routinely earns the highest public approval rating of any agency in the federal government. But then it layers on the bad news: the decline in first-class mail volume—$65 billion in losses since 2009, an “unsustainable fiscal path.”
Amazingly, the policy section alludes to the inability of the USPS to fund retiree health and pension benefit obligations, without stating that it has the impossibly high statutory burden of pre-funding those obligations 75 years out, effectively having to pay today for future workers who have not yet been born.
Amazingly, the policy section alludes to the inability of the USPS to fund retiree health and pension benefit obligations, without stating that it has the impossibly high statutory burden of pre-funding those obligations 75 years out, effectively having to pay today for future workers who have not yet been born. No public agency or private company has any similar burden. It was placed on the Postal Service in the 2006 Postal Accountability and Enhancement Act to deliberately cripple the agency at the behest of UPS and FedEx, its two major competitors on package delivery. There should be no confusion: Without this completely anomalous pre-funding mandate, the USPS would be a money-making operation, regardless of the rise of email.
But while alluding to “inflexible costs,” the executive order says that the USPS “must be restructured to prevent a taxpayer-funded bailout.” Yet, a true restructuring would require only one line of legislative text: “The 75-year pre-funding mandate is hereby repealed.” The fake crisis would be over. But that’s not what Donald Trump’s minders want.
The executive order establishes a task force, chaired by Treasury Secretary Steven Mnuchin, to “evaluate the operations and finances of the USPS.” Also on the task force are anti-government zealot and Office of Management and Budget Director Mick Mulvaney, former Booz Allen Hamilton lawyer and Office of Personnel Management Director Jeff Pon, and whomever else Mnuchin wants to throw in.

In reality, there’s already a “task force” empowered to evaluate the Postal Service. That’s the USPS Board of Governors, an 11-member panel that operates like the board of directors of a corporation, empowered to review all policies and practices and engage in long-range planning. But this board, which includes the postmaster general, their deputy, and nine presidential appointees, has not had a new member confirmed since the George W. Bush administration. It’s been operating without a quorum since 2015, and currently all nine appointee positions are vacant. The Trump administration took until October of last year to nominate three of the open nine governor seats; they’re only getting a confirmation hearing next week.
If Trump, or anyone in his administration, were actually concerned with Postal Service operations, he’d quickly stock its board. Instead, he’s formalizing a task force to look into undermining it. Here are some things the executive order wants the task force to look into:
“The USPS’ role in competitive markets,” specifically package delivery, where it competes with private shippers;
“Issues relating to government monopolies operating in the commercial marketplace”;
“The USPS monopoly over letter delivery and mailboxes”; and
“The definition of the ‘universal service obligation’ in light of changes in technology, e-commerce, marketing practices, and customer needs.”
I think the goal is clear. The task force is being prodded to open up the mailbox to any company, and degrade the centuries-old tradition that the post office deliver anywhere in the nation, through snow or rain or heat or gloom of night. After eliminating these public benefits, the task force might seek to bar the post office from competing in markets where the private sector operates, or to privatize the agency altogether, selling its infrastructure off for parts.
These have long been hard-right fantasies, which, if made real, would be a direct money funnel to UPS and FedEx’s corporate treasuries, to say nothing of Amazon, whose cash reserves could easily buy Postal Service infrastructure.
These have long been hard-right fantasies, which, if made real, would be a direct money funnel to UPS and FedEx’s corporate treasuries, to say nothing of Amazon, whose cash reserves could easily buy Postal Service infrastructure. In fact, the executive order says that the final report should take into account the views not only of postal workers and consumers, but also of “competitors in the marketplace.”
This report of “administrative and legislative reforms” to the post office is due August 10. Legislative recommendations would obviously have to pass Congress, and that’s unlikely even today, given the important role the post office plays in rural communities.
But we’ve already seen bids to privatize and undermine the Postal Service administratively. In 2013, the Postal Service partnered with Staples to sell stamps and deliver mail and packages inside their stores, with their non-union workers. The American Postal Workers Union kicked off a long campaign to stop this, but the practice only stopped after a National Labor Relations Board judge ordered it. Trump’s NLRB might not have the same posture if the “Approved Shipper” program were restarted.
The USPS already gives competitors a sweet deal to participate in its own destruction. It ships the last mile for UPS, FedEx, and Amazon, delivering the packages that are unprofitable for those companies to deliver themselves. And the Postal Service’s leadership has repeatedly cut employee hours and eliminated routes, closing post offices and laying off tens of thousands of workers in the process. Having a government task force call for the death of the post office will build on these efforts at self-immolation.
The solutions here are obvious. The post office has the advantage of 30,000 locations, universal service, and a wider reach than for-profit companies could ever cast, paid for by taxpayers. Returning to the postal banking system we had from 1911 to 1967, which offers financial services to the unbanked with simple accounts and even small loans, would fit the agency’s mission of expanding commerce and save billions for vulnerable populations—all the while shoring up postal finances. The author of a 2014 white paper on postal banking, then-USPS Inspector General David Williams, is one of the nominees for the Board of Governors, and if allowed to do his job, Williams could fix up a system that would solve numerous problems at once.
This is one of a many ideas to maintain the Postal Service’s strong position at the center of American life, where it’s been since before the Constitution was written. Instead, Donald Trump, while claiming fake concern for the USPS getting “ripped off” by Amazon, wants to empower a gang of cretins bent on selling off the agency for parts.

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Trump orders Postal Service review after attacking Amazon

by Chris Isidore @CNNMoney   April 13, 2018: 1:41 PM ET

President Trump stepped up his long-running battle with Amazon, ordering a federal task force to investigate the Postal Service’s finances.
The executive order issued late Thursday night does not mention Amazon by name, but Amazon is the subtext.Trump has frequently complained that Amazon (AMZN) takes advantage of the post office. Trump is angry at Amazon in part because its CEO, Jeff Bezos, is also the owner of The Washington Post, whose coverage Trump complaints about.
The Postal Service is a government agency, but it operates as an independent business without direct taxpayer support. The order points out that the post office has lost $65 billion over the last 11 fiscal years.
“It shall be the policy of my administration that the United States postal system operate under a sustainable business model to provide necessary mail services to citizens and businesses, and to compete fairly in commercial markets,” Trump wrote in the order.
In his previous tweets, Trump has insisted that the Postal Service is losing money on the package deliveries it handles for Amazon.
Amazon has a confidential agreement with the Postal Service under which it delivers large numbers of packages directly to the post office nearest to where they need to be delivered. The Postal Service then delivers the packages to their destinations.
This kind of confidential contract is not unusual for the Postal Service. Many large shippers negotiate them. They pay rates based on volume and what the post office has to do to make the deliveries.
The Postal Service says the law requires that such negotiated contracts must cover the Postal Service’s costs and that regulators have studied the Amazon contract and approved it.
Amazon also has a special agreement with the Postal Service to deliver packages on Sundays in limited major markets. Neither Amazon nor the post office has disclosed the details of that agreement, but the Postal Service says it’s mutually beneficial.
Some critics, including post office competitors such as UPS (UPS), have challenged the claims that the Postal Service’s negotiated deals with bulk shippers truly cover its costs, especially considering that the post office loses so much money.
Citigroup last year found that Postal Service prices would have to go up by $1.41 per package — about 40% — to reflect the true cost of delivery for all its customers. The Citigroup analysts estimate that would add $2.6 billion to Amazon’s shipping costs, an increase of 28%. Amazon has disputed those estimates.
The executive order noted that the post office’s problems are caused by many factors: steep declines in first class mail, laws that require the service to deal with large inflexible costs, and revenue that no longer covers pension and retiree health obligations.
“The USPS is on an unsustainable financial path and must be restructured to prevent a taxpayer-funded bailout,” Trump said in the order.
The Postal Service issued a statement Friday welcoming the task force.
“As we have repeatedly stressed, these business model problems are serious, but solvable, and the President’s executive order … provides an opportunity to further consider these important public policy issues,” the statement said.
Although the revenue from both first class letters and other types of mail, such as magazines, has steadily declined, online shopping has driven package delivery demand higher. The post office’s most recent fiscal report shows package and parcel delivery was up $1.6 billion, or 19%, last year, at a time when revenue from all other types of mail fell by $2.5 billion, or 4%.
Related: Trump’s attacks on Amazon are a problem for your 401(k)
A major part of the Postal Service’s financial problems is a government mandate that it pay up front for retiree pension and health care expenses. Those obligations for current and past employees stood at $38 billion at the end of its most recent fiscal year. Private businesses that have retiree benefit obligations are not required to pay those amounts up front.


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Fact Check: Is Amazon bankrupting the USPS? (Video)

Fact Check: Is Amazon bankrupting the United States Postal Service?

Fact Check: Is Amazon bankrupting the United States Postal Service?Full Report:

Posted by on Thursday, April 5, 2018

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Trump says he’ll increase Amazon’s postage rates

April 2, 2018 postal
Donald Trump’s ignorance knows no bounds, but he seems particularly unhinged today, apparently claiming that he can increase postal rates for Amazon:
From the Washington Post:

President Trump on Monday doubled down on his criticism of the U.S. Postal Service’s arrangement with Amazon, saying he would change how much the country’s largest online retailer pays in shipping fees:
“Only fools, or worse, are saying that our money losing Post Office makes money with Amazon,” he tweeted Monday morning. “THEY LOSE A FORTUNE, and this will be changed.”
Trump, of course, has no such power- even a legitimate, popularly elected President can’t unilaterally change postal rates.
Trump does have the ability to fill the vacant seat on the PRC, but as with so many vacancies in the federal government, he hasn’t bothered to nominate anyone.
Source: Trump keeps up Twitter assault on Amazon, this time criticizing its U.S. Postal Service contract – The Washington Post

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