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The Quest for Postal Survival Continues
By Bob Levi
NAPS Director of Legislative & Political Affairs
What a difference a month makes! In mid-May, the U.S. Postal Service projected that the financial impact of the COVID-19 would yield postal insolvency by the end of the fiscal year. The agency assumed that volume would tank and even an uptick in package volume would not sufficiently increase revenue to forestall running out of cash by Sept. 30, 2020.
A short-term legislative Band-Aid enacted in March, the “CARES Act,” made available a $10 billion loan contingent on the Postal Service complying with yet-to-be disclosed Treasury Department-imposed conditions. It has been reported these conditions included dramatic postage increases to competitive postal products and draconian cuts to employee benefits.
At the request of Congress, the Postal Service revisited its earlier financial projection and modified it. This end-June fiscal update reflected a higher than anticipated increase in package deliveries for April and May. According to USPS data, package deliveries increased 20% to 50% in April, depending on the week, and 60% to 80% in May, as compared to the same period last year.
The bottom line is that the revised USPS projection postpones the inevitable postal insolvency until either March or October 2021, depending on whether or not package volume retreats to pre-pandemic levels. Nevertheless, the Postal Service still lost $225 million in May.
The explosion in parcel volume illustrates the country’s reliance on the Postal Service to carry American commerce and critical health care products, particularly prescription medications, during a natural disaster. Congressional and White House failure to maintain the trusted and essential component of our nation’s vital infrastructure would undermine our economy.
There are two byproducts of the revised projection. First, the Postal Service will not have to request access to the $10 billion loan to remain afloat and subject itself to White House demands that employee benefits be cut and certain postage be increased by as much as 400%. Second, those in Congress reticent about emergency postal aid will derail bipartisan efforts to address the eventual crisis.
NAPS recognizes that the apparent short-term financial reprieve will not sustain the Postal Service. Meaningful and constructive legislation to permit the Postal Service to continue to serve the American public and business community is the only responsible way to address the needs and sustainability of the agency. With that in mind, on behalf of EAS postal employees, NAPS continues to push for postal relief.
Executive Vice President Ivan D. Butts and I have conducted numerous Zoom meetings with NAPS state legislative chairs and key legislative activists in legislatively crucial states. We also are “Zooming” with key policymakers to promote our membership’s interests. For example, we are working collaboratively on a bipartisan basis to secure more support for H.R. 7015, the “Postal Preservation Act.” As you read in last month’s Postal Supervisor, the bill was introduced by House Oversight and Reform Committee Chairman Carolyn Maloney (D-NY) and former House Homeland Security Chairman Peter King (R-NY).
Before leaving for the July 4th weekend, former Senate Homeland Security and Governmental Affairs Committee Chairman Susan Collins (D-ME) and Sen. Dianne Feinstein (D-CA) introduced a bipartisan postal relief bill. S. 4174, the “Postal Service Emergency Assistance Act,” would provide the USPS with up to $25 billion in COVID-19-related emergency funding, clarify that the $10 billion loan previously authorized in the “CARES Act” be subject to the same conditions extended in previous loans (i.e., no new Treasury Department conditions) and direct the USPS to send Congress a plan to ensure the long-term solvency of the agency.
Both H.R. 7015 and S. 4174 seek to provide emergency appropriations to the Postal Service, with bipartisan support. The House-passed “HEROES Act” includes a $25 billion postal appropriation, hazard pay for front-line postal employees and elimination of the Treasury Department loan conditions of the “CARES Act.” Enactment of the “HEROES Act” is complicated by its absence of bipartisan support, especially in the Senate.
Before July 4, the House approved a major infrastructure bill, H.R. 2, that includes $25 billion for postal infrastructure investment. Of the total postal appropriation, $6 billion is earmarked for next-generation postal delivery vehicles.
It is important to note that our success in ensuring policymakers who share your postal priorities are elected to the House and Senate relies, in part, on your generous support of the Supervisors’ Political Action Committee (SPAC). So, if you have not done so already, please complete the form enclosed with last month’s issue of The Postal Supervisor and send it back with your SPAC contribution. Better yet, join hundreds of your colleagues in our “Drive for 5” campaign and make a payroll or monthly annuity withholding for SPAC.
Finally, in the midst of the Postal Service’s challenges regarding COVID-19, the Senate confirmed two new members to the Postal Board of Governors. On June 18, the Senate confirmed William Zollars and Donald Lee Moak. Zollars is the former chairman of YRC Worldwide, a freight and logistics company. Moak is a former Delta Airlines pilot and former president of the Air Line Pilots Association.
With their confirmation, there are seven presidentially nominated governors seated; the board has a working quorum. However, there still are two governor vacancies and the deputy postmaster general position has yet to be filled.
The quest for postal survival continues and Election Day is less than four months away.