WASHINGTON — The coronavirus pandemic is ravaging the US Postal Service, with mail quantity down by practically a 3rd already in comparison with id
WASHINGTON — The coronavirus pandemic is ravaging the US Postal Service, with mail quantity down by practically a 3rd already in comparison with identical time final yr and dropping shortly, as companies drastically reduce on solicitations, commercials and every kind of letters that make up the majority of mail service’s backside line.
The falloff comes at the same time as package deal supply has surged — however not by practically sufficient to offset the losses from mail quantity.
The consequence, the Postal Service advised Congress on Thursday, is a multibillion-dollar monetary shortfall that might trigger one of many authorities’s oldest and most dependable entities to expire of money by the tip of September and throw common supply into doubt at a time when Individuals should be trapped at dwelling.
Megan J. Brennan, the postmaster normal, advised lawmakers on the Home Oversight and Reform Committee on Thursday that the company believed it might want $25 billion in federal grants to cowl misplaced income from the pandemic, plus an extra $25 billion to replace growing old infrastructure. One other $14 billion is required to repay long-term debt associated to the Postal Service’s retirement advantages program together with $25 billion in unrestricted borrowing authority to climate the quickly unfolding disaster, she stated, in accordance with officers aware of the data she shared privately, who described it on situation of anonymity.
Even with a rise in on-line buying and package deal supply to Individuals cooped up at dwelling, the company may see a 50-percent discount in whole mail quantity by the tip of June, in comparison with the identical interval final yr, Ms. Brennan advised the lawmakers. Postal officers worry a large portion of that misplaced mail could by no means return.
In whole, the Postal Service anticipates shedding $13 billion in income this fiscal yr due to the pandemic and one other $54 billion in losses over 10 years.
“They’re chilling numbers,” stated Consultant Gerald E. Connolly, Democrat of Virginia, who leads the Home subcommittee accountable for the Postal Service. “The response of numerous my colleagues — their jaws had been dropping. It’s one factor to say the Postal Service is struggling. It’s one other to listen to these specifics.”
As Congress spends trillions of {dollars} to attempt to save non-public companies with loans and grants, the Postal Service has emerged as an uncommon sticking level, slowed down by a long-running debate over its future. The company doesn’t usually use taxpayer cash, however has struggled in recent times below mounting debt.
Home Democrats are prepared to provide the Postal Service most of what it’s asking for. However President Trump has to this point rejected direct aid, repeatedly saying the Postal Service may clear up its personal woes just by elevating costs on packages delivered for large on-line retailers like Amazon.
Steven Mnuchin, the Treasury secretary, squashed a bipartisan try to ship the company emergency funds final month, insisting as a substitute that his division be given new authority to lend as much as $10 billion to the Postal Service on phrases it helps set, different officers aware of the negotiations stated.
Ms. Brennan advised lawmakers on Thursday that the company was already in talks with the Treasury concerning the potential mortgage, however its income predictions counsel that cash wouldn’t be sufficient if the disaster continues.
For now, the mail service, which operates below government-mandated service necessities, has continued uninterrupted. Whilst scores of its greater than 600,000 particular person work pressure have fallen unwell and a few have died, mail sorters and carriers have continued to walk their routes in every corner of the country, in many cases the only physical lifeline Americans now have to the outside world. They deliver medicines, election ballots, coronavirus test kits and packages ordered online.
But the administration’s position has fanned fears among some lawmakers, postal union representatives and others who rely on the service that Trump administration officials are willing to let the postal network essentially go bankrupt to force its leaders to accept an overhaul to the postal business model that many conservatives have long sought — one that could limit delivery service and aid commercial competitors like FedEx and UPS.
In a statement to The New York Times, Ms. Brennan said the Postal Service was “at a critical juncture,” quickly losing revenue because demand for its most profitable postal products was “plummeting as a result of the pandemic.”
“At a time when America needs the Postal Service more than ever, the reason we are so needed is having a devastating effect on our business,” she said. “The sudden drop in mail volumes, our most profitable revenue stream, is steep and may never fully recover.”
She called on Congress to “shore up the finances of the Postal Service, and enable us to continue to fulfill our indispensable role during the pandemic, and to play an effective role in the nation’s economic recovery.”
Negotiators on Capitol Hill had reached a tentative deal last month to provide the Postal Service around $13 billion dollars in direct relief as part of the $2 trillion CARES Act. The figure would have been far below a proposal by House Democrats, but it had the buy-in of a key Republican negotiator: Senator Ron Johnson of Wisconsin, the chairman of the Senate Homeland Security and Governmental Affairs Committee, according to the officials familiar with the talks, where were not authorized to publicly discuss them.
But Mr. Mnuchin said the administration would not have it. The Treasury secretary told lawmakers that a direct infusion of cash was a non-starter, and advocated instead for creating the $10 billion in new lending authority. Department officials did not respond to a request to comment Thursday on postal issues.
Mr. Connolly said Thursday that he would recommend House leadership promptly back the new, higher figures presented by the Postal Service.
“We weren’t shooting for the moon. We weren’t solving all the problems. We were just trying to get them through,” Mr. Connolly said. “The question is, will the Republicans join us?
Some Republican lawmakers remain open to direct cash payments, as well, under certain circumstances. Historically, the Postal Service has counted on strong support from Republicans representing rural districts, where their service is a lifeline to homes and small businesses. But it is unclear if they would allocate the funds without imposing reform requirements on the agency or if they are willing to overpower Mr. Mnuchin and the White House.
An independent executive agency, the Postal Service has not taken federal funding in decades, running instead off revenue raised from stamps and other postal products. But since the 2008 financial crisis, it has struggled to stay in the black, weighed down largely by a congressional mandate to pre-fund its retirement benefits programs.
The agency has stopped making those payments in recent years, running up billions of dollars in debt, while its mail delivery business has otherwise remained profitable. Lawmakers in both parties have proposed overhauls to the service along the way, but none have stuck.
The postal unions and Democrats fear that the Trump administration is now trying to take advantage of the coronavirus crisis to push through a long-sought overhaul of the Postal Service that would benefit private package carriers and eliminate certain costly rural delivery routes.
Mr. Trump has frequently criticized the service for not charging higher prices to deliver packages for large online retailers like Amazon — a company he has sometimes singled out in his Twitter tirades on postal issues. Aides have said the president’s criticisms often followed critical stories about his administration published by the Washington Post, which is owned by Amazon founder Jeff Bezos.
He repeated the criticism this week, as he appeared to reject calls for a cash bailout. Asked about Mr. Connolly’s proposal, he said the congressman should focus instead on raising package delivery prices.
“Tell your Democrat friend that he ought to focus on that, because if he focused on that, he could truly save the Post Office,” the president said.
Mr. Trump ordered a review of the Postal Service and its pricing policies in 2018. His administration published the review in December of that year. Its recommendations included steps that could reduce the frequency of mail delivery and increases in the prices of sending some packages. Online retailers criticized the recommendations, which they said could particularly hurt rural customers.
The report did not spur any action in Congress last year. But a longtime congressional advocate of changes to the service, Mark Meadows of North Carolina, recently took over as Mr. Trump’s chief of staff. Critics of the report fear the White House could be trying to use the pandemic as another opening.
“At the end of the day, they have an agenda,” said Mark Dimondstein, the president of the American Postal Workers Union, which represents 200,000 postal workers. “Raise prices, reduce worker benefits, and reduce services, make it appear more profitable and set it up for sale.”
“The Covid crisis should not be used to achieve political aims,” he added.
A lobbying group on postal issues that includes Amazon and other online retailers, the Package Coalition, raised concerns this week that the strings Treasury officials might attach to postal loans could raise prices during a pandemic that has made Americans more dependent on package delivery.
“The Treasury has the Postal Service over a $10-billion barrel, and the Postal Service is on the brink of bankruptcy,” said the coalition’s chairman, the former Army secretary John M. McHugh. “What do you do? We’re worried they’ll accept the terms.”