The Controversial New Plan to Reinvent the Post Office

By Yuval Rosenberg

The Controversial New Plan to Reinvent the Post Office

Saying the United States Postal Service needs to cut costs and
invest in growth, Postmaster General Louis DeJoy on Tuesday
unveiled a strategic plan to overhaul the public mail service and
set it on a path to breaking even over the next 10 years.

The "Delivering for America"
plan would take numerous steps to alter mail
delivery — including raising rates, slowing the delivery of
first-class mail and cutting hours at post offices around the
country — while eliminating a projected $160 billion deficit at
USPS over a decade. DeJoy said that if all of his proposals were
carried out immediately, the USPS would be in the black within just
three years.

On the investment side, the plan calls for new processing
equipment, energy-efficient trucks, more extensive training, new
uniforms and more sophisticated technologies for use by mail
carriers. At the same time, expectations for delivery of
first-class mail would be pushed from the current three-day
standard to five days, though the majority of mail would still be
delivered within three days.

Some of the proposed changes would require assistance from
Congress. Perhaps most significantly, DeJoy wants lawmakers to end
the mandate for the USPS to pre-fund its retiree health care
program, which costs the mail service nearly $5 billion per
year.

Critics react: Appointed by former President Donald
Trump, DeJoy has been accused by some Democrats of intentionally
slowing the mail in the run-up to the election last fall, and some
lawmakers have called for him to be removed. Whatever the cause,
complaints about delays in mail deliveries have persisted, and
critics of DeJoy’s proposal expressed concerns about any further
cuts to service.

House Oversight Chairwoman Carolyn Maloney (D-NY) rejected the
"unacceptable decision to make permanent slower mail delivery,"
while Rep. Gerry Connolly (D-VA) called it "a draconian plan that
guarantees the death spiral of the United States Postal
Service."

The American Postal Workers Union also expressed concerns about
the plan. "At a time that the public is demanding faster delivery
of mail and packages, proposals that would slow the mail and reduce
retail services — such as changing service standards, plant
consolidations and reducing operating hours at post offices — will
only have a negative effect on postal workers and the public," the
labor organization said in a
statement.

The bottom line: It will be hard to
separate the proposal from the politics, but some parts of the plan
could become reality as the mail service seeks to modernize and
reduce losses. "The government has told us to break even, to be
self-sustaining," Ron Bloom, a Trump appointee who chairs the
Postal Service’s board of governors,
told The Wall Street Journal. "They’ve also told
us that the only place you get money is from the sale of your
product. The only way that circle squares is if we can charge a
little more for our product."

Don’t Expect the Next Spending Bill to Be Bipartisan

A group of 20 centrist senators has been meeting to see if they
can make some deals to write legislation on a bipartisan basis. If
successful, the senators could become a power center that helps
mold successful bills in Congress in the coming months, while
fulfilling President Joe Biden’s promise to work across the aisle
on Capitol Hill.

That’s a big "if." The group, evenly divided between Democrats
and Republicans, "is off to a rough start," NBC News’ Sahil Kapur

reported Wednesday. "It is ill-defined and lacks a
clear focus or method," Kapur wrote. "It has yet to show signs of
success in the new presidency."

Some long-time observers aren’t surprised. Chris Krueger of
Cowen Washington Research Group said in a note Wednesday that on
many important issues, the parties are just too far apart on policy
to reach an agreement. "Maybe we are far too cynical, BUT on the
recovery bill (just like relief bill) we remain long reconciliation
& short bipartisanship: GOP not going to bite," Kreuger wrote.
"‘Infrastructure’ for Biden Democrats is geared toward climate &
racial equity crisis. There are not 10 GOP Senators on board for
that."

Much like with the $1.9 trillion relief bill the president
signed earlier this month, here’s how Kreuger sees the next
spending package playing out: "Biden plays ‘pragmatic deal guy’
card & try for a deal….it will fall apart…then Manchin/Sinema will
try…then it will fall apart…then in early May they start the
reconciliation process...one enormous bill follows. Earmarks will
help. Senate Dems are on board w/ higher taxes – only question is
how high."

Yellen Says Limits on State Aid in Covid Bill Raise ‘Thorny’
Questions

The $1.9 trillion Covid rescue plan passed by Democrats provides
$350 billion in direct aid to states, cities and counties, but
lawmakers — worried that the money might be used for matters
unrelated to the pandemic — restricted states from "directly or
indirectly" using the funding to cut taxes. Treasury Secretary
Janet Yellen on Wednesday acknowledged in testimony before the
Senate Banking Committee that the restriction raises a number of
"thorny" issues for her department as it works to issue guidance on
how states can use the money they receive.

"We will have to define what it means to use money from this act
as an offset for tax cuts," Yellen said, according to
The New York Times. "Given the fungibility of
money, it’s a hard question to answer."

Twenty-one Republican state attorneys general have
asked for clarification and threatened legal
action against the Biden administration over the restrictions,
saying that the vague language in the legislation may be "an
unprecedented and unconstitutional intrusion on the separate
sovereignty of the States." They argue that the restriction, if
interpreted broadly, "would represent the greatest invasion of
state sovereignty by Congress in the history of our Republic."

Ohio’s attorney general sued the administration last week,
arguing that the law violated the state’s constitutional right to
set its own tax policies.

Yellen on Tuesday refuted those concerns. "It is well
established that Congress may place such reasonable conditions on
how States may use federal funding. Congress includes those sorts
of reasonable funding conditions in legislation routinely,
including with respect to funding for Medicaid, education, and
highways," she wrote in a letter
responding to the attorneys general. "Nothing in the Act prevents
States from enacting a broad variety of tax cuts. That is, the Act
does not ‘deny States the ability to cut taxes in any manner
whatsoever.’ It simply provides that funding received under the Act
may not be used to offset a reduction in net tax revenue resulting
from certain changes in state law."

The law’s restrictions wouldn’t apply, she said, if states
lower taxes but offset the lost revenue through means other than
the Covid relief funds.

The Treasury Department has 60 days from when the law was
enacted to issue its guidance on how the money can be
spent.

What the states get: A new
visualization by the Rockefeller Institute of
Government breaks down the payments to state, county, city and
municipal governments.

"California, Texas, New York, and Florida are expected to
receive the largest total amounts of state and local funding,"
Rockefeller’s Laura Schultz writes. "On average, the funds deliver
$980 per resident, with Wyoming, Vermont, and Alaska projected to
receive the most per resident. States in the Northeast and upper
Midwest are receiving higher than average per capita funding.
States in the southeast and lower Midwest appear to be getting
lower than average."

This map shows the total funds, with amounts in
millions:

And here’s a look at what states get on a per
capita basis:
Finally, here’s a breakdown by state of the direct
aid from both the CARES Act passed in March 2020, which included
$150 billion for state and local governments, the American Rescue
Plan.

Quote of the Day

"Of course, our finances need to be on a sustainable long-run
path and that’s a very critical responsibility for all of us. My
views on the amount of fiscal space that the Unites States has,
though, I would say have changed somewhat since 2017… . It’s partly
because the interest rate environment has been so very low. … It
certainly does not mean that anything goes. I believe in responding
to a crisis with a needed surge of spending that’s temporary, that
it was fully appropriate not to pay for it under the circumstances.
But longer-run, we do have to raise revenue to support permanent
spending that we want to do."

– Yellen, at Wednesday’s Senate Banking Committee hearing, when
asked if the growing national debt is something to be concerned
about. Both Yellen and Federal Reserve Chair Jerome Powell told
senators that continued support for the economy from the federal
government and the central bank
is still needed.

Poll of the Day: Strong Support for a Public
Option

A new Politico/Morning Consult poll finds that 68% of voters
support a giving Americans the option to buy a government-run
health insurance plan that competes with private insurance, while
55% support a Medicare for All single-payer plan. Opinions of
Medicare for All remain sharply divided along partisan lines, with
79% of Democrats supporting it but 62% of Republicans opposed.

"The pandemic has exposed all of the holes in our existing
health care safety net and how fragile our employer-based system
is, but it doesn’t seem to be that the higher level of awareness is
translating into support for Medicare for All," Sabrina Corlette, a
research professor and co-director of the Center on Health
Insurance Reforms at Georgetown University, told
Morning Consult.

The same poll finds that, as Congress moves to reinstate
earmarks, just
19% of voters say they favor the idea
of directing funds to specific recipients in congressional
districts.

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