Trump authorizes task force for postal reorganization

Tonda Rush

May 4, 2018

WASHINGTON, D.C. — President Donald J. Trump jumped into the postal reform wars in April with an executive order creating a 120-day task force to reorganize the troubled U.S. Postal Service.

“… [A] number of factors, including the steep decline in First Class Mail volume, coupled with legal mandates that compel the USPS to incur substantial and inflexible costs, have resulted in a structural deficit where revenues are no longer sufficient to fund the pension liabilities and retiree health obligations owed to current employees. The USPS is on an unsustainable financial path and must be restructured to prevent a taxpayer-funded bailout,” the order said.
The order cited factors that have prompted Congressional debate since at least 2007:

• $65 billion in cumulative losses (most of which is from the mandated pre-funding of postal retirees’ health benefits required in the 2006 reform legislation).

• USPS’s inability to make those payments.

• A determination since 2009 by the Government Accountability Office that USPS is at high risk of failure.

Trump said his administration’s policy is for USPS to operate on a sustainable business model and to “compete fairly in business markets,” an apparent reference to increasingly insistent complaints by the United Parcel Service that the postal administration is unfairly subsidizing package delivery with its market dominant mail revenues.

The task force will be chaired by Secretary of the Treasury Steven Mnuchin and comprise other administration officials including Office of Management and Budget Director Mick Mulvaney and acting Office of Personnel Management Director Kathleen McGettigan.

The task force is required to report to the president its recommendations for reform after investigating USPS finances and its various legal mandates, including service to America’s small towns. The task force does not include the postmaster general or the acting chair of the Postal Regulatory Commission but requires the task force to consult with those officials.

The order was taken in stride by many of the stakeholders involved in postal legislation, with some warning that the task force should not veer off into diminishing the postal network.

Sen. Heidi Heitkamp, D-ND, who has pressed for better rural mail delivery, issued a statement that the task force should take into account the importance of USPS in rural areas.

“There is simply no substitute for the Postal Service in rural America. In many cases, the Postal Service has been a great equalizer, enabling Americans no matter where they live to get their mail and packages in a timely, affordable manner—and that’s especially important for families and businesses in rural communities like those across North Dakota,” Heitkamp said. “I agree with the president that we must act quickly to revitalize this integral American institution, and it is important for this task force to examine why the Postal Service is in its current financial state.” Heitkamp is co-sponsoring, with Sens. Tom Carper, D-DE, Claire McCaskill, D-MO, and Jerry Moran, R-KS, the Postal Service Reform Act of 2018, S. 2629, a bill that would reform the required prepayments. But there is no indication that Senate leadership intends to allow the bill to reach the full Senate.

NNA President Susan Rowell, publisher of the Lancaster (SC) News, said it was no surprise that the White House had concerns about USPS.
“Congress has not been able to agree on a path forward, and seems more inclined to let the present situation drift until a crisis forces action. That is irresponsible, in our view, because so many small businesses depend upon the cash flows supported by the mail. In our world, we count on USPS to deliver newspapers to our subscribers. This dependence may be somewhat less true in urban areas, but in America’s small towns, the USPS network is the backbone of our printed communications,” she said. “If this task force can find us a path to securing the future of this mail delivery, we welcome it.”

Rowell noted, however, that the task force’s key recommendations would be likely to require legislation for implementation.

“We would like to be optimistic that positive reform actions would be undertaken by this Congress, but the reality is that late in an election year is not the most propitious time for serious legislation. Fortunately, much of the background work is already done and has been developed through more than a decade of Congressional hearings and draft legislation. We cannot wait for action. Congress must shore up universal service, reverse the debilitating prepayment requirement and help USPS get back on its feet,” she said.

In other action:

The Senate Homeland Security and Governmental Affairs Committee recommended confirmation of three nominees to the USPS Board of Governors: Robert M. Duncan of Kentucky; Calvin Tucker of Pennsylvania; and David Williams, former USPS inspector general, of Virginia. USPS has been operating without a governing board for more than a year as the Senate has been unable to confirm presidential nominees.