Pandemic Hit Postal Service Finances Hard, but $25 Billion Rescue Deal Remains Stuck in Senate

July 28, 2020by Todd J. Gillman and Paul Cobler, The Dallas Morning News (TNS)
Postal trucks are parked at a United States Postal Service post office location in Washington, DC. (Saul Loeb/AFP via Getty Images)

WASHINGTON — Every day the U.S. Postal Service delivers 430 million letters and packages, including 4 million prescriptions, from Mesquite to Marfa, and from the high rises of Manhattan to the shores of Maui.

“We’d be lost without it, truthfully,” said Larry Maresh, 82, whose printing shop in Pearland, Texas, gets 90% of its revenue through sales fulfilled by mail. “If we didn’t have the Postal Service it would be terrible. That would be like cutting off your right arm.”

But like most businesses, the Postal Service has taken a big hit during the COVID-19 pandemic. In early April, the Postal Service was projecting losses of $2 billion a month. The postmaster general warned that funds to pay workers and suppliers would run out by September.

Insolvency could mean layoffs and major service rollbacks.

As it turned out, Americans settled in for the long haul and fortunes changed. An explosion of home deliveries has brought three months of Christmas-level revenue in parcels, largely offsetting huge drops in marketing and first-class mail, the most profitable products. But even with the better-than-expected revenues, the agency says it will need help from Congress to survive.

The Postal Service has covered its own costs for 40 years since Congress ended taxpayer subsidies, it now says it needs lots of help — help that Congress has so far not provided.

That has small-business owners and seniors who rely on daily deliveries of payments and medicine worried, and postal workers call it demoralizing to see subsidies for airlines and other industries but not them.

“They call us essential workers, but they want to be able to ignore us. … I don’t see why anyone would feel that we should be left out,” said Dallas letter carrier Kimetra Lewis, a 33-year postal employee and president of the local branch of the National Association of Letter Carriers. “We’re living in a world right now with so many uncertainties.”

It’s a huge workforce of about 625,000, including 204,000 letter carriers.

About 1 of every 100 has tested positive for COVID-19 since early April, and roughly 6,300 are currently in quarantine. That’s down from a peak of about 9,000 but double what it was a month ago.

At least 75 postal workers have died of COVID-19, according to the National Postal Mail Handlers Union, which lost four of its members, though it’s not always possible to point to their work as the source of the infection.

The postal board of governors has asked Congress for $25 billion to cover COVID losses over the next two years, plus another $25 billion for modernization, $14.4 billion in forgiveness of outstanding loans, and a $25 billion line of credit.

In mid-May, the Democratic-controlled House approved $25 billion as part of the Heroes Act, a $3 trillion rescue package for essential workers during the pandemic. The bill is stalled in the Senate, where Majority Leader Mitch McConnell and fellow Republicans spent last week huddling with the White House on the next phase of stimulus. McConnell said Friday that it could take weeks to finalize a plan.

Meanwhile, a bipartisan group led by Republican Sen. Susan Collins of Maine and Democratic Sen. Dianne Feinstein of California is pushing a stand-alone bill to inject $25 billion over two years. Sen. Ron Johnson, R-Wis., who chairs the postal oversight subcommittee, has resisted.

“Congress must provide emergency funding for the Postal Service just as it has for other essential industries,” Feinstein said. “We cannot let so vital an agency fail.”

The Democratic Governors Association has been trying to drum up support.

“Millions of people rely on the Postal Service to get groceries, medicine and their ballots — especially during the coronavirus pandemic. Without immediate help, the Postal Service and its more than half a million employees could be out of work in two short months,” the group warned this week.

Two months is overly dire. Updated projections point to insolvency hitting between March and October next year.

The Postal Service said in a statement that it “is developing a business plan to ensure that we will be financially stable and able to continue to provide dependable, affordable, safe and secure delivery of mail and packages to all Americans as a vital part of the nation’s critical infrastructure.”

With the beefed-up $600-a-week jobless benefit about to expire for tens of millions, and unemployment still widespread, concern remains high.

“Everyone’s working from home and sheltering in place, so people are buying online. It’s across the board — FedEx, UPS, Amazon, everybody’s off the charts,” said Jim Sauber, chief of staff at the letter carriers union. “Our big concern is that this big surge in parcel volume is going to dry up when income dries up.”

The White House has so far resisted outright subsidies.

Early in the crisis Congress authorized up to $10 billion in emergency loans. But Treasury Secretary Steven Mnuchin won’t release the funds without steep rate hikes for parcels, a long-standing goal of the president.

Although the postal board of governors is controlled by Trump appointees, it has declined to take the money on those terms.

Trump called the Postal Service a “joke” in late April for failing to quadruple package prices, which would put a squeeze on Amazon and its billionaire owner, Jeff Bezos, who also owns The Washington Post, whose coverage Trump frequently complains about.

The Heroes Act would bar Treasury from imposing such demands.

A poll that the letter carriers union commissioned this month that focused on older voters — who are more likely to rely on mail service for medicine and other necessities — found overwhelming support for federal relief, with 9 in 10 agreeing that Congress should provide billions needed to shore up the finances.

The support cuts across party lines, ranging from 83% of Republicans to 97% of Democrats, with little variation by region or among rural, suburban and urban voters.

“There’s overwhelming public support for postal funding. We’re just trying to raise the awareness,” said Sauber. “This is a really important part of the economic infrastructure. It’s also really an important part of recovering from this pandemic.”

The USPS is the largest employer of military veterans, among them Javier Bernal, a 60-year-old letter carrier in Houston.

He’s been delivering mail for nearly 37 years after a four-year stint in the Navy, and he’s the letter carrier union’s top official in Texas.

Bernal hopes Congress takes to heart the public’s affection for letter carriers as lawmakers divvy up billions in the next round of stimulus.

“You get to know and see all kinds of people in different communities,” he said. “It’s always a privilege to provide and bring people their mail, their prescriptions and medications, or just a hello.”

As millions hunker down during the pandemic, he added, “we’re still out there delivering, day in and day out,” even in 100-degree Texas heat, wearing masks.

Maresh, who owns Monarch Printing in Pearland, is among the grateful customers.

“That’s what I look forward to every day when the mailman gets here, usually around 4 o’clock,” he said. “He takes what I have for him, and he brings everything for me.”


©2020 The Dallas Morning News

Distributed by Tribune Content Agency, LLC.

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