Pelosi Looks to Deliver $25 Billion for USPS

By Yuval Rosenberg

Pelosi Looks to Deliver $25 Billion for Postal Service

The House is set to vote Saturday on legislation that would
block operational cutbacks to the United States Postal Service and
add $25 billion in funding to help prop up the service ahead of the
November elections, which is expected to see a surge of mail-in
ballots.

White House Chief of Staff Mark Meadows dismissed the Democratic
plan as "partisan," according to
Politico. "It's not only unrealistic, it's
unnecessary," he told reporters Monday. Other Republicans have
expressed support for providing the Postal Service with emergency
funding.

The Postal Service has become a political flashpoint as
President Trump has railed against voting by mail, which he has
claimed without evidence could lead to widespread fraud.

Postmaster General Louis DeJoy, a Republican donor appointed to
the position by Trump, has sparked controversy by instituting
operational changes that he has described as necessary
cost-reduction efforts. Critics suggest ulterior motives, and
ethics watchdogs have raised concerns that DeJoy may have conflicts
of interest since he
hasn’t divested a multimillion-dollar stake in his
former company, XPO Logistics, which processes mail for the Postal
Service.

Post offices across the country have reported delays in mail
delivery in recent weeks, and the Postal Service recently sent
letters to 46 states and the District of Columbia warning that it
cannot guarantee all ballots cast by mail for November’s elections
will arrive in time to be counted, The Washington Post
reported Friday.

Trump last week
acknowledged that his efforts to block funding to
the Postal Service would leave it unable to handle the increase in
mail-in voting.

Democrats and others pounced on Trump’s comments as evidence
that he is trying to "sabotage" the election and disenfranchise
voters for political reasons, and House Speaker Nancy Pelosi called
for the House to return from its August recess to vote on the
Postal Service legislation.

The $25 billion Democrats are looking to provide the USPS is the
same amount they included in a coronavirus relief bill that passed
the House in May. Democratic leaders and White House negotiators
had reportedly agreed to $10 billion in USPS funding during
discussions about the next coronavirus relief package, but those
talks broke down without the parties reaching a broader deal.
Pelosi has emphasized that the Postal Service’s bipartisan,
Trump-appointed board of governors had requested an emergency cash
infusion of $25 billion earlier this year.

Trump
indicated Friday that he would be open to
providing more funding for the Postal Service, and more than $3
billion for mail-in balloting and other "election resilience"
measures — but that’s if Congress agrees to his administration’s
coronavirus relief plans. On Monday, Trump told "Fox & Friends"
that he’s just trying to fix the Postal Service. "This has been one
of the disasters of the world, the way it’s been run," he said. In
a
tweet later on, he added: "The U.S. Post Office (System)
has been failing for many decades. We simply want to MAKE THE POST
OFFICE GREAT AGAIN, while at the same time saving billions of
dollars a year for American Taxpayers. Dems don’t have a clue!"

What’s next: Any legislation passed by the House would
also have to clear the Senate. Majority Leader Mitch McConnell
(R-KY) on Monday said Republicans are willing to provide more money
to the Postal Service, even as he made clear he doesn’t share the
concerns about election security raised by Trump. But he also gave
no indication that he’s going to give in to pressure to have the
Senate return from its recess to address the issue.

"The Postal Service is going to be just fine," McConnell told
reporters in Kentucky. "We're going to make sure that the ability
to function going into the election is not adversely affected and I
don't share the concerns that the president ... has mentioned."
McConnell noted that the Trump administration has already indicated
it is willing to provide $10 billion to shore up the Postal
Service.

While the fate of the legislative effort is unclear,
Democrats are also pursuing oversight investigations. DeJoy and
Robert Duncan, the chairman of the U.S. Postal Service Board of
Governors, have
agreed to testify next week before the House
Committee on Oversight and Reform.

McConnell Not Sure There Will Be Another Covid Relief Bill

Senate Majority Leader Mitch McConnell (R-KY) said Monday that
while he thinks the country needs another coronavirus relief
package, he’s not sure it will happen.

"We do need another bill and I'm hoping that this impasse will
end soon," McConnell said at an event in Kentucky, The Hill

reported. But he also said that, "as of the
moment, today, I can't tell you with certainty we're going to reach
an agreement," while noting that the coming elections will only
make the negotiations more difficult.

Warnings on the lack of fiscal support. Economists have
expressed concerns about the withdrawal of federal stimulus
spending over the last few weeks, especially the abrupt end in July
of the $600 per week payments Congress had provided to the
unemployed. Ernie Tedeschi of Evercore ISI
said Monday that by his calculations, total unemployment
payments have dropped by about $15 billion per week since the
enhanced benefits expired. "That's the equivalent of almost 4% of
GDP," he tweeted. (See his chart below.)

Analysts at the Peterson Institute for International Economics

warned last week that the failure of lawmakers to
agree on a new coronavirus relief package that renews expiring
programs "threatens to undo the stimulus effect of the programs and
exacerbate the economic damage from the lockdown." Assuming no
further federal assistance is provided, the analysts estimated that
the recession would be deeper than otherwise, with a 4% to 5% loss
of GDP and a similar increase in unemployment.

"US policymakers should at least maintain the earlier
levels of income support to prevent further induced economic
damage," the analysts argued. "In the current depressed state of
the economy, destimulation is a very poor policy
choice."

Cities Brace for Coronavirus Budget Cuts — in Red States,
Too

Many U.S. cities are experiencing a revenue crunch due to the
coronavirus pandemic, forcing sharp budget cuts that will stretch
into next year, according to a new analysis that will appear in the
National Tax Journal.

Cities that rely heavily on tourism (e.g., New Orleans) or
assistance from state governments (e.g., Rochester, New York) will
be particularly hard hit, the study found, with budget cuts of up
to 20% in the next fiscal year relative to pre-pandemic spending
levels.

And contrary to charges made by President Trump that cities are
suffering because they were badly run by Democrats, the drop in
revenues is very much a bipartisan affair, with some of the
worst-hit cities located in both Democratic-controlled New York and
Republican-dominated Florida.

"The Great Recession was a story of long, drawn-out fiscal pain
— this is sharper," said economist Howard Chernick, one of the
study’s authors.

City leaders make the case for a fiscal lifeline.
Reporting on the analysis Monday, Emily Badger and Quoctrung Bui of
The New York Times
said that if Congress is unable to make a deal to
aid cities — an issue that has divided Democrats and Republicans so
far — the budget cuts will be "enough for residents to experience
short-staffed libraries, strained parks departments and fewer road
projects."

Mayor Lovely Warren of Rochester, New York, explained to the
Times why her city needs federal assistance:

"We can’t produce money, we can’t borrow our way out of this,
we can’t tax our way out of this. But our residents expect that the
trash will be picked up on trash day. They expect that the snow
will be plowed when it snows. They expect that when they call 911
that a police officer will show up. For Washington to ignore that
reality — it hurts."

Dave Massaron, the chief financial officer for Detroit,
argued that dealing with the fallout from an international pandemic
is beyond the ability of individual cities. "This is really what
the federal government was built to do: to handle these events that
are bigger than the borders of a city and bigger than the borders
of a state," he said.

Pentagon Could Cut $2.2 Billion from Military Health Care

Officials at the Defense Department have proposed to cut $2.2
billion from health care spending over the next five years,
Politico reported Sunday.

The proposed cuts are part of an initiative by Defense Secretary
Mark Esper to cut unnecessary spending at the Pentagon. But two
senior defense officials told Politico the cost-cutting efforts
have been executed too hastily, and that the proposed cuts to
health care spending would harm patients.

The $2.2 billion in cuts would be imposed on the defense health
system, which serves nearly 10 million active duty personnel,
retirees and family members. Leaders would be tasked with finding
spending to cut — and that’s where the problem may arise.

"A lot of the decisions were made in dark, smoky rooms, and it
was driven by arbitrary numbers of cuts," a senior official told
Politico. "They wanted to book the savings to be able to report
it."

Another official warned that the proposed reductions would
reduce the Pentagon’s medical capabilities while saving little
money in the end, since the military health system would become
more reliant on relatively expensive private health networks to
provide care.

The Defense Department said the matter was still under
review.

Read
the full report at Politico.

Reminder: The Democratic National Convention
kicks
off tonight at 9 p.m. ET. (Also, the NBA playoffs start
tonight. The ratings for both may be interesting to watch.)

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