Congressional “Stimulus” Rebuffs Unions, Lets the USPS Go Deeper in Debt

By voice votes in the Senate on March 26 and the House on March 27, Congress last week passed HR 748, the Middle Class Health Benefits Tax Repeal Act of 2019, a $2.2 trillion program to help the nation’s economy and citizens deal with, and recover from the consequences of the ongoing virus-related crisis. Conspicuously missing was any aid for the Postal Service. Instead, the bill only allowed it to borrow another $10 billion from the Treasury, going even deeper in debt.

The final version of the bill was a dark disappointment for many in the mailing industry as well as the postal unions and their allies, who’d hoped Congress would use the occasion to lift some of the Postal Service’s burden of debt – not make it worse.

The postal unions

A March 18 letter to Congressional leadership from the four major postal unions had urged Congress to pass a “stimulus” for the Postal Service. While the letter may at first blush have seemed like a message of support for the USPS, it also sought some clearly pro-union benefits, extras that may have soured any interest among some in Congress. At the outset, the writers described a dismal scenario:

“Unfortunately, the deep economic recession we expect from this public health crisis poses a serious threat to the near-term viability of the Postal Service. The agency, weakened by a unique statutory mandate to prefund retiree health decades in advance at an average cost of $5.4 billion annually since 2007, faces massive losses in the current crisis – mail volume is expected to plummet as economic activity grinds to a halt due to efforts to stop the spread of the virus. …

“Congress could avert a major crisis in the mailing industry by taking urgent action to stabilize the Postal Service that would preserve its universal networks that are so valuable to our economy – and to our fight against the Covid-19 virus. …

In some ways, the Postal Service is already in a “crisis” but, having watched this situation unfold for years, Congress has thus far been disinterested in meaningful action to help the situation; authorizing it to add another $10 million in debt is like towing a drowning man farther out to sea.

In the ensuing paragraphs of their letter, the postal unions began decorating their Christmas tree of suggestions:

“1) In order to stabilize the Postal Service during the coming recession, temporarily revive the 10% ‘public service’ appropriation that existed at the time the Postal Service was created in 1971 for two years, setting it at 10% of the Postal Service’s 2019 revenues. … But given the dire emergency facing our nation and the Postal Service, its temporary revival would save millions of jobs in the broader mailing industry. A temporary 10% USPS subsidy would pale in comparison to the all but permanent 50% subsidy provided to Amtrak.”

Why the Postal Service hasn’t itself sought to resume the “public service” appropriation is a good question, but urging Congress to spontaneously provide the appropriation likely fell flat. (And mentioning the politically unpopular Amtrak appropriation likely didn’t help, either.) Moreover, contrary to the unions’ claim, providing a subsidy to the USPS would do nothing to “save millions of jobs in the broader mailing industry.” The loss of clients for commercial mail producers would not be ameliorated by a subsidy for the USPS.

Continuing their wish list, the unions added:

“2) Additionally, Congress should repeal the retiree health prefunding mandate. This unfair burden accounts for nearly 90% of the Postal Service’s losses since 2007. ... A bipartisan majority of the House already adopted this proposal by passing the USPS Fairness Act (HR 2382) by a vote of 309-106 in February. ….”

Aside from the fact that the prefunding mandate was added to the 2006 law to improve its “score,” not to manage future costs, the argument that imposing it was “unfair” has gone nowhere with Congressional budget hawks who would oppose its elimination. HR 2382 may have passed in the “blue” House, but its passage in the “red” Senate is less likely. Moreover, as reflected by the recent budget documents, the Treasury no longer assumes that the Postal Service is ever going to make the defaulted payments, further diluting any Congressional interest in wiping clean the prefunding slate.

“3) … In order to stimulate the economy and create tens of thousands of American jobs in the manufacturing sector (which was in recession even before the present public health crisis), the Congress should invest in the Postal Service by making a one-time appropriation of $10 billion for a new fleet of electric-powered vehicles … This policy would strengthen the Postal Service, promote manufacturing jobs and help fight climate change.”

At this point, anyone in the unions’ audience who wasn’t among their friends may have set the letter aside. Urging help for the USPS is one thing, but trying to expand that into a jobs bill is another matter but, not knowing when to stop, the unions went on:

“4) To further boost jobs in the construction sector, Congress should enact an appropriation of $5 billion to the USPS to finance long-delayed investments in the Postal Service’s facilities, including both repairs and replacements.”

Where the writers came up with the $5 billion figure wasn’t clear, but that proposal has less to do with the USPS than with the simple creation of union jobs. As if the laundry list of wishes the unions were advancing wasn’t already unlikely to be well-received, spinning ideas to help the USPS into a premise for job creation likely was the last nail.

“5) … The novel coronavirus could disrupt the 2020 general election. It would be a tragedy if fear of infection depressed turnout in 2020 – or if it discouraged volunteers from serving as judges in polling place elections. …

Vote by mail is a growing trend that doubtless makes voting simpler and easier, which is why it’s opposed by some politicians who believe easier balloting would favor their opponents. Moreover, many in Congress would conclude that the operation of the polls is a local responsibility to be managed locally, free of federal mandate.


 

...to be continued. 

Part 1 of 2, excerpted from the March 29 edition of Mailers Hub News. Check back Monday to continue with part 2!

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