Pressure for USPS Funding Ramps Up as Budget Outlook Worsens

U.S. Postal Service stakeholders and employees are escalating their calls for financial assistance for the mailing agency as it reports new budget shortfalls amid the novel coronavirus pandemic. 

USPS lost $1.2 billion in April, according to preliminary financial data, compared to just $338 million in the same period in 2019. Factoring out fluctuations in interest on workers’ compensation costs, the gap was $470 million. Volume for regular, first class mail, the Postal Service’s most profitable offering, fell by 9% year-over-year, while marketing mail dropped by 45%. 

Treasury Secretary Steve Mnuchin said at a virtual event hosted by The Hill last week USPS does not need immediate access to a $10 billion loan Congress authorized in response to the pandemic, citing an uptick in package business as Americans on stay-at-home restrictions boost their online ordering. He suggested the agency may not need the loan at all, though the numbers paint a different picture. While package volume jumped 35% in April compared to the previous year, it is a more labor-intensive, and therefore less profitable, product. 

Operating revenue for the Postal Service fell by about 4% in the month, while costs grew by 10%. Former postal board member David Williams resigned last month over concerns about Mnuchin placing conditions on USPS before Treasury would release a $10 billion loan. President Trump has said he would object to any effort to provide financial assistance to the cash-strapped agency, stating it should instead raise its rates. 

Postal union leaders on Wednesday cautioned the package uptick was temporary, predicting the volume increase would subside as retail stores reopen across the country. They vowed to unleash lobbying efforts on lawmakers to ensure Congress includes a cash injection for the Postal Service in its next round of stimulus payments. 

“Not more debt, not more loans,” said Mark Dimondstein, president of the American Postal Workers Union. “Appropriated relief.”

National Association of Letter Carriers Executive Vice President Brian Renfroe said his organization has launched television and digital advertising to “mobilize voters” to pressure lawmakers into assisting the Postal Service. The union officials said they would focus their efforts on Republican senators who represent rural states, as well as on House Democrats to ensure they “do not cave” this time around. The Democrats had pushed for $25 billion for USPS in the last stimulus package, but backed down to demands from the White House. 

“While past administrations have been indifferent to the Postal Service,” said Paul Hogrogian, president of the National Postal Mail Handlers Union, “this administration has been outright hostile.”

The House lawmakers this month again unveiled legislation that would repeal Treasury’s authority to place conditions on the $10 billion, instead making the loan available as soon as the postal board requested it. The bill, part of a larger $3 trillion package to stimulate the economy during the ongoing pandemic, would also provide a $25 billion cash injection to the Postal Service to help it offset revenue lost during the economic downturn. Lawmakers also introduced a bipartisan measure this week, the Postal Preservation Act, to provide $25 billion to USPS. That followed a letter issued by 10 senators last month, including five Republicans, advocating "significant emergency appropriations" and a no-strings-attached loan.

Postal management has requested $75 billion in financial relief from Congress and additional debt forgiveness, but the need for immediate assistance remains in question. While postal management said earlier this year it would likely run out of cash by the end of September, the agency said in a financial document last month that by accessing the $10 billion loan from Treasury and prioritizing some payments over others "it expects that it will have sufficient liquidity to continue operating through at least May 2021."

As USPS is dealing with the financial fallout from the coronavirus pandemic, it is also facing a crisis among its workforce. Nearly 4,000 employees have tested or are presumed positive for COVID-19, while 25,000 have quarantined due to potential exposure. More than 60 employees have died. Union officials and employees have praised postal management, especially in recent weeks, for its efforts to protect workers and provide the appropriate equipment and supplies. USPS is now piloting several initiatives, including temperature checks, more widespread testing and masks better suited for summer heat, at facilities across the country. 

Some outbreaks are still occurring, however, leading to tension with local leaders. The Denver Department of Public Health and Environment last week ordered a mail processing plant there to close after five employees tested positive for COVID-19, but USPS has so far refused. The plant sorts and distributes all mail for Colorado and Wyoming. 

"In terms of how disease needs to be controlled in a facility, it doesn’t matter if it’s a federal facility or a local business, we need to get the same type of information and implement the same types of controls to keep employees and the public safe," Danica Lee, the public health director in Denver, told an NBC affiliate there. 

A USPS spokesman told the network the facility was responsible for delivering essential goods and information to millions of customers and would not close. 

"This is a federal facility. It’s protected by federal law enforcement officers," the spokesman said. "It will not be shut down."