Postal Service Overhaul Gets Priority as Trump Targets Amazon

April 23, 2018 Jack Fitzpatrick

Congress is speeding up its efforts to address the U.S. Postal Service’s financial problems, a push that comes as President Donald Trump has accused the online giant, Inc., of contributing to the post office’s woes.

House and Senate measures would reduce the Postal Service’s health benefits obligations, partly by shifting eligible employees and retirees to Medicare, in addition to allowing a 2.15 percent rate increase for some USPS services. Lawmakers in both parties have said an overhaul is necessary for an agency that has reported losses for 11 consecutive years.

The move on Capitol Hill to deal with the Postal Service’s red ink comes after Trump criticized in a series of tweets in late March and early April Amazon’s contract with USPS. “Only fools, or worse, are saying that our money losing Post Office makes money with Amazon. THEY LOSE A FORTUNE, and this will be changed,” Trump wrote on April 2.

The House bill (H.R. 756), which languished after its original sponsor, former House Oversight Committee Chairman Jason Chaffetz (R-Utah), retired from Congress last year, is now a “top-five priority” for Rep. Mark Meadows (R-N.C.), who is chairman of the Government Operations Subcommittee of the House Oversight and Government Reform Committee.

Meadows, who also leads the conservative House Freedom Caucus, said he hopes to “get a coalition together who could support a Postal bill” in the next few weeks, although he isn’t sure when the bill might get a floor vote. Rep. Tom Garrett (R-Va.) has also taken over as the bill’s primary sponsor.

In the Senate, Majority Leader Mitch McConnell (R-Ky.) invoked a rule to bring a similar USPS solvency bill (S. 2629) straight to the floor, bypassing the Homeland Security and Governmental Affairs Committee.

That committee also held a hearing last week on three nominees to the Postal Service’s Board of Governors, which hasn’t had a quorum since 2014. The hearing was a key step in voting on the nominations, which will be pivotal before a series of USPS contracts, including one with Amazon, expire in October.

Amazon Deal

Few details of Amazon’s contract with USPS have been made public, other than that it was a five-year deal that expires this October.

“Anytime you hear the Postal Service is losing money on Amazon it’s pure speculation because that is a private contract and nobody knows what it is,” Mark Fallon, president and CEO of the Berkshire Co., a consulting group focused on mail strategies, said in a phone interview earlier this month.

Publicly available details of USPS finances indicate delivery contracts such as its agreement with Amazon aren’t the reason for its struggles. Revenue from shipping and packages grew 11.8 percent from fiscal 2016 to 2017, while revenue dropped for first-class mail, marketing mail and periodicals.

Health benefits have been a major expense for the Postal Service since a 2006 law (Public Law 109-435) required the service to fund those benefits fully for 75 years into the future.

Trump created a task force earlier this month aimed at examining “the expansion and pricing of the package delivery market and the USPS’s role in competitive markets.”

Amazon, amid congressional and executive branch action on Postal Service issues, has ramped up its lobbying efforts. It spent almost $3.4 million on lobbying in the first quarter of 2018, 16.6 percent more than the first quarter of 2017, according to lobbying disclosure filings with Congress. United Parcel Service Inc. spent about $3.7 million in advocacy, 22.1 percent higher than a year earlier. FedEx Corp. meanwhile, spent slightly more than $2.5 million in the first three months of this year, a 5.2 percent drop from the first quarter of 2017.

It’s hard to tell if Trump’s feud with Amazon is what spurred some of the action in Congress, Fallon said. He noted the Senate hearing on the Board of Governors nominees is particularly important.

“I can’t tell if it’s coincidence or if it’s a factor,” Fallon said. “But they actually are having, for first time, those hearings, so that’s really, really cool.”

Meadows said Trump “was very accurate in some of his statements” on the Postal Service. Sen. Tom Carper (D-Del.), the sponsor of the Senate USPS bill, said it’s misguided to blame a delivery contract for the agency’s fiscal woes, saying it’s one of the few USPS services that’s making money.

“A lot of the packages and parcels they’re carrying are for Amazon,” Carper said in an interview last week.

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