Sep 7, 2020
The mail has been slow this summer, no doubt about it, but didthe Trump administration slow the mail down on purpose in order tointerfere with mail-in voting? In this episode, listen tohighlights of recent emergency Congressional hearings in order tolearn what's really going on at USPS. The sabotage is real, but thesituation is different from what you probably think. Special guest:Alexis Claypool Glaser
Executive Producer: Jose Huerta
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Recommended Episodes
CD153:Save the Post Office! Listen onSpotify
CD186: National Endowment for Democracy, Listen onSpotify
Bills
H.R.6307 - Postal Accountability and Enhancement Act
Signed into law on December 20, 2006
Votes: Passed the House by voice vote. Passed the Senate byUnanimous Consent.
Four people have their names on the law: 2 Republicans, 2Democrats
Articles/Documents
- Article: Postal Service Has Paid DeJoy's Former Company $286 Million Since2013 by Luke Broadwater and Catie Edmondson, New York Times,September 2, 2020.
- Article: The Postal Service controversy generated plenty of heat. Now wehave some light. By Kim Lyons, The Verge, August 25, 2020
- Article: Outdated Mail Sorting Machine Thrown Out at USPS Center inColorado By Khaleda Rahman, Newsweek, August 25, 2020
- Article: Empty USPS Trucks Are Driving Across Country Without Mail ByDaniel Villarreal, Newsweek, August 24, 2020
- Article: Postal trucks sometimes travel across country - with no mail -after USPS cuts By Ben Hall, Kevin Wisniewski, News Channel 5Nashville, August 24, 2020
- Article: Donald Trump lashes out at ballotdrop boxes in latest attack against mail-in voting...byKatelyn Caralle, The Daily Mail, August 23, 2020.
- Article: Mnuchin Paved Way for Postal Service Shake-Up By Kenneth P.Vogel, Jessica Silver-Greenberg, Alan Rappeport and Hailey Fuchs,The New York Times, August 22, 2020
- Article: How Trump, Mnuchin and DeJoy edged the Postal Service into acrisis By Lisa Rein, Michael Scherer, Jacob Bogage and JoshDawsey, The Washington Post, August 22, 2020
- Article: CREW LETTER DETAILS DEJOY’S CONFLICT OF INTEREST BREACHES ByJenna Grande, CREW, August 21, 2020
- Article: These are the sorting machines USPS removed that would handle mailand election ballots By Paul P. Murphy, CNN, August 21,2020
- Document: U.S. Treasury Role as Lender to U.S. Postal Service ByDepartment of the Treasury, August 21, 2020
- Article: USPS Headquarters Tells Managers Not to Reconnect Mail SortingMachines, Emails Show By Aaron Gordon, Vice, August 20,2020
- Article: Years of turmoil at Postal Service governing board fueled politicalfirestorm, critics say By Lucien Bruggeman, ABC News, August20, 2020
- Article: "It's a Cover-Up": White House Accused of Hiding Mnuchin Role inRecruiting Postmaster General DeJoy By Jake Johnson, CommonDreams, August 20, 2020
- Article: Here's why the Postal Service wanted to remove hundreds ofmail-sorting machines By Jacob Bogage and Christopher Ingraham,The Washington Post, August 20, 2020
- Article: ‘Like Armageddon’: Rotting food, dead animals and chaos at postalfacilities amid cutbacks By LAURA J. NELSON, MAYA LAU, The LosAngeles Times, August 20, 2020
- Article: Top Postal Service Official Details Mnuchin Extortion Effort ByDavid Dayen, The American Prospect, August 20, 2020
- Article: Postmaster Louis DeJoy Gave Millions to Republican Candidates. Willthe GOP Bite the Hand that Fed Them? By Tim Dickinson, RollingStone, August 19, 2020
- Article: DeJoy donated big to GOP senators up for re-election; they're stillsilent on USPS By Tim Dickinson, Rolling Stone, August 19,2020
- Article: Treasury’s Role in the Postal Sabotage By David Dayen, TheAmerican Prospect, August 18, 2020
- Article: DeJoy donated big to GOP senators up for re-election; they're stillsilent on USPS By Roger Sollenberger, salon, August 18,2020
- Article: Unsanitized: Political Tide Begins to Turn in Postal ServiceCrisis By David Dayen, The American Prospect, August 17,2020
- Article: U.S. Postal Service letters to states The Washington Post,August 17, 2020
- Article: Postal Service warns 46 states their voters could bedisenfranchised by delayed mail-in ballots By Erin Cox, EliseViebeck, Jacob Bogage, and Christopher Ingraham, The WashingtonPost, August 14, 2020
- Article: Postmaster general under fire over Amazon stock holdings By KimLyons, The Verge, August 13, 2020
- Article: Financial disclosures reveal postmaster general's businessentanglements and likely conflicts of interest, experts say ByMarshall Cohen, CNN, August 12, 2020
- Article: How Trump’s mail voting sabotage could result in an election nightnightmare By Aaron Rupar, Vox, August 11, 2020
- Article: Trump administration taking unusual steps to put its stamp onPostal Service ahead of November elections By Jeremy Herb andJessica Dean, CNN, August 10, 2020
- Article: Postal Service says it has 'ample capacity' to handle electionafter Trump casts doubt By Jessica Dean, Jessica Schneider andCaroline Kelly, CNN, August 3, 2020
- Article: Treasury agrees to lend Postal Service $10 billion in trade forrivals' shipping contracts By Jacob Bogage, The WashingtonPost, July 29, 2020
- Letter: Addressed to Louis DeJoy, Postmaster General From StevenMnuchin, Federal News Network, July 28, 2020
- Article: Trump personally pushed postmaster general to double rates onAmazon, other firms By Damian Paletta and Josh Dawsey, TheWashington Post, May 18, 2020
- Document: United States Postal Service: A Sustainable Path Forward ByDepartment of the Treasury, December 4, 2018
- Article: Miscarrying at Work: The Physical Toll of PregnancyDiscrimination By JESSICA SILVER-GREENBERG and NATALIEKITROEFF, The New York Times, October 21, 2018
- Order: Executive Order on the Task Force on the United States PostalSystem White House, April 12, 2018
- Article: Donald Trumpto return to NC for first time as president By Brian Murphy,The News & Observer, October 3, 2017
- Article: U.S. Postal Service to halt retail sales at Staples stores afterunion complaints By Joe Davidson, The Washington Post, January5, 2017
- Article: USPS's controversial deal with Staples headed to showdown overlegality By Lisa Rein, The Washington Post, January 16,2015
- Article: Staples' selling postal products without USPS workers bringscomplaints of privatization By Joe Davidson, The WashingtonPost, January 16, 2014
- Article: Obama's Partly to Blame for the Postal Service's Backward WaysBy David Dayen, The New Republic, February 10, 2014
- Article: Are Contract Postal Units and Village Post Offices the Post Officeof the Future? By Damian Paletta and Josh Dawsey, United StatesPostal Service, Office of Inspector General, October 24, 2011
- Document: ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIESEXCHANGE ACT OF 1934 By UNITED STATES POSTAL REGULATORYCOMMISSION
- Document: ThePostal Accountability and Enhancement Act: Overview and Issues forCongress By Kevin R. Kosar, Congressional Research Service,December 14, 2009 ______
Additional Resources
- Bill: H.R.8015 - Delivering for America Act
- Tweet: LeaderMcConnell, Twitter, August 22, 2020
- Profile: John Barger,LinkedIn
- Collection: PRC Reports, Postal Regulatory Commission
- Postal leadership: Robert M. Duncan
- Leadership: Board ofGovernors
Images
Source: @realDonaldTrump,Twitter
Source: @realDonaldTrump,Twitter
Sound Clip Sources
News: BillMaher’s New Rules segment, Twitter, August 28, 2020
Hearing: Protecting the Timely Delivery of Mail, Medicine, and Mail-InBallots, House Oversight and Government Reform Committee,August 24, 2020
Witnesses:
- Louis DeJoy: Postmaster General
- Robert Duncan: Chairman of the United States Postal ServiceBoard of Governors
Transcript:
1:34:35Rep. Jim Cooper (TN) Mr. DeJoy, as a megadonor forthe Trump campaign, you were picked along with Michael Cohen andElliot Broiding, two man who have already pled guilty to felonies,to be the three deputy finance chairman of the Republican NationalCommittee. Did you pay back several of your top executives forcontributing to Trump's campaign by bonusing, or rewarding them?Louis DeJoy: That's an outrageous claim, sir, andI resent it. Rep. Jim Cooper (TN) I'm just askinga question. Louis DeJoy:* The answer is no. **Rep. JimCooper (TN) So you did not bonus or reward any of yourexecutives. Louis DeJoy: No. Rep. JimCooper (TN) Anyone that you solicited for contribution tothe Trump campaign? Louis DeJoy: No, sir.Rep. Jim Cooper (TN) Not in whole or in part?Louis DeJoy: Actually, during the Trump campaign.I wasn't even working at my company anymore. Rep. JimCooper (TN) Well, we want to make sure that... campaigncontributions are illegal. So all your campaign are legal.Louis DeJoy: I'm fully aware of legal campaigncontributions. And I resent the assertion? So what are you accusingme of? Rep. Jim Cooper (TN) Well, I'm asking aquestion. Do your mail delays fit Trump's campaign goal of hurtingthe post office, as stated in his tweets? Are your mail delaysimplicit campaign contributions? Louis DeJoy: I'mnot going to answer these types of questions. I'm here to representthe Postal Service, it has nothing to do with... All my actionshave to do with improvements in postal service. Am I the only onein this room that understands that we have a $10 billion a yearloss. Right. Am I the only one in this room that has looked at theOIG reports that have stacked up? Rep. Jim Cooper(TN) Will you give this committee your communications withMark Meadows, with Treasury Secretary Mnuchin, with the President.Louis DeJoy: Go ahead and do that. Rep.Jim Cooper (TN) Mr. DeJoy, is your backup plan to bepardoned like Roger Stone? You have two seconds to answer thequestion. Louis DeJoy: I have no comment onthat.
1:36:50Rep. Greg Stube (FL): I as a veteran who served inIraq in support of Operation Iraqi Freedom to compare postalworkers to our military service members in Iraq or Afghanistan,quite frankly, to me is offensive. Last time I checked PostalService drivers weren't getting their vehicles blown up by IEDs arebeing shot out as they drove around and delivered mail. So to tryto compare our military service members who sacrifice on thebattlefields across this world to our postal service members, thatis frankly offensive as a person that had served.
1:54:45Louis DeJoy: It was the summertime, mail volumewas down significantly, so it was not...we're getting ready for thepeak season and an election is three months away. It was a goodtime to start to try and roll this out that we are getting therequest was just run your trucks on time, put a plan to run yourtrucks on time.
1:56:05Rep. Gerry Connolly (VA): Do you not tell theBoard of Governors this month, in August, that in fact you have hadcontact with a Trump campaign to ask them to stop their attacks onthe Postal Service and voting by mail? LouisDeJoy: I have put words around to different people thatthis is not helpful to... Rep. Gerry Connolly(VA): You did have contact with the Trump campaign, for agood purpose? Louis DeJoy: I'm trying tothink...when you say the Trump campaign, I've not spoken to Trumpcampaign leadership in that regard. I've spoken to people that havefilled that out that are friends of mine that are associated withthe campaign. Rep. Gerry Connolly (VA): One ofthem was Steve Mnuchin. Louis DeJoy: Steve Mnuchinis Secretary of Treasury. Rep. Gerry Connolly(VA): I know. Louis DeJoy: Yeah, I neverspoke to Steve about telling the President to not do something.
2:19:20Rep. Jamie Raskin (MD): What do you make of theformer Chairman of the Board of Governors, Mr. Fineman callingTreasury Secretary Mnuchin involvement's in the selection process'absolutely unprecedented.' Louis DeJoy: StephenMnuchin had nothing to do with my selection. Okay. I was called byRussell... Rep. Jamie Raskin (MD): Did you talk toSecretary Mnuchin about taking the job? There was report that youhad lunch together to discuss it? Louis DeJoy:Totally inaccurate and outrageous. Rep. Jamie Raskin(MD): You've never talked to him about it, before takingjob you never talked to him about taking the job? LouisDeJoy: I talked to him about the job after I received theoffer. I did not accept the offer immediately. Rep. JamieRaskin (MD): Okay, but you never spoke to him before abouthis soliciting your interest in the job or... LouisDeJoy: He did not solicit any interest. I kept myinterest, which as you identified, he did not know that I had aninterest. I had a perfectly good life prior to this, but I wasinterested in helping and I was called by Russell Reynolds out ofthe blue.
2:53:00Rep. Ro Khanna (CA): Thank you, Mr. DeJoy forbeing here. I want to see if we can find some common ground toresolve some of the differences. Can you begin by sharing with theAmerican people in this committee, the unofficial motto of thepostal service? Louis DeJoy: No rain or snow,sleet nor hail will make our delivery? Rep. Ro Khanna(CA): Yes. It's about service. Correct, not about profit.Do you know how many veterans served in the postal service? About?Louis DeJoy: 100,000? Rep. Ro Khanna(CA): Correct. Do you know what percentage of veteransabout rely on the postal service for their prescription medicine?Louis DeJoy: I don't know. Rep. Ro Khanna(CA): It's a high number. It's about 80% of veterans. So Iguess my beginning I want to ask you this, you know, our defensedepartment. We don't tell them you have to go sell weapons to makerevenue to serve the American people. We don't say that about ourhealth service, or the National Institute of Health. Why should wehave a different standard for the postal service? Why do you haveto go and make a profit instead of just serving the Americanpeople, sir, it's interesting and good question. And it's not thatwe need to make a profit. It's to be self sustaining, which meansat least cover your costs. But why it's such a small. I'm not alegislator, I'm the Postmaster General Do you know? I mean, do youknow the history? Do you remember the time in the Postal Servicehistory where that wasn't a requirement? LouisDeJoy: I do in the 70s. Rep. Ro Khanna(CA): Actually, it was from 1840 to 1970. We funded thePostal Service, we didn't require them to make a profit because wethought people should in rural America and other places and ourveterans should serve and one of the reasons people serve in thePostal Service who've served in our military is they view it aspublic service.
2:54:50Rep. Ro Khanna (CA): Your perspective is thatthese mail sorting machines aren't required, because packages needto be delivered and open up floor space. It's your testimony thatyou didn't direct it, correct? Who directed it? LouisDeJoy: I didn't, have not done and investigation. It cameprobably through our operations. It's been a long term and youdon't know who directed it. You don't know who implemented it.Louis DeJoy: Well, there's hundreds of them aroundthe country in different places. It was an initiative within theorganization that preceded me.
2:56:15Rep. Ro Khanna (CA): So if it costs less than abillion dollars, regardless of whether it's efficient or not, whatis the harm in just putting those machines back until Election Day,just for the peace of mind for the confidence of the Americanpeople? Louis DeJoy: Well, first of all, sir,we've heard all statistics about the mail and the votes and soforth. Right. And we don't need the machines to process it. But youmake a statement about for a billion dollars, if we just gave you abillion dollars, you're not going to give us a billion dollars.We're going to make a request. You have no way of getting us abillion dollars. We haven't been funded in 10 years. You can't passany legislation that helps the Postal Service. Rep. RoKhanna (CA): If I can just finish this point. We give youthe money. Do you see my point? Louis DeJoy: It'sa hypothetical, I'm not willing to...you haven't given us anymoney, you haven't given us any legislation and you're sitting hereaccusing me with regard to the machines as the committee.Rep. Ro Khanna (CA): But what is the harm? I thinkmost Americans are trying to understand what is the harm in puttingthese machines even if the machines in your perspective don't doanything, what is the harm to do until Election Day. LouisDeJoy: In Washington, it makes plenty of sense, to me itmakes none. Rep. Ro Khanna (CA): You haven'texplained why and then final question. LouisDeJoy: Because they're not needed that's why. Rep.Ro Khanna (CA): But if it will restore people's faith in ademocracy and avoid a polarized electorate, I would think it...Louis DeJoy: Okay, get me the billion and I'll putthe machines in. Rep. Ro Khanna (CA): Okay, well,that's a commitment. We'll find a way to get you the money.
3:17:20Rep. Glen Grothman (WI): You right now have I'mtold about $14 billion in the bank. Do you anticipate the electioncausing that to be rundown at all? Or do you anticipate it goingup, would have any dent on it? Louis DeJoy: Idon't think it will have too much of an impact in either way.Rep. Glen Grothman (WI): Okay, so if you had 14billion in the bank, now, you're still going to have 14 billion onas you know, on December first. Louis DeJoy: Thatit this point we lose, we will probably lose 10 or $11 billion thisyear. So depending on how package volume stays, we could have lesscash. And if I may, having $14 billion, we also have, I have $12billion worth of liabilities that need to be paid at some time overthe next six months. We have $135 billion of liabilities, wewanting a 633,000 person organization that does not get fundingeven though the federal government ends in September, they have anexpectation of getting funding. We don't have an expectation ofgetting funding so we have to drive cost out and increase revenue.And that's the big difference that we have than any other agency.So for $14 billion, while it sounds like a lot of money, it's not alot of money for what we do.
3:22:10Rep. Debbie Wasserman-Schultz (FL): I want to takethis opportunity to enter into the record Madam Chair, on August 182020 emailed from USPS Director of Maintenance Operations KevinCouch. Madam Chair. The email reads "please message out to yourrespective maintenance managers tonight they are not to reconnect,reinstall machines that have been previously just been disconnectedwithout approval from headquarters maintenance no matter whatdirection they are getting from their plant manager." Mr. DeJoy,yes or no. And you've indicated in this committee hearing that it'snot your job to decide about whether sorting machines are on oroffline. But at the same time you told Mr. Khanna that you won'tbring them online because they're not needed. So yes or no, haveany plant managers requested mail sorting machines be reconnected?Louis DeJoy: First of all, Rep. DebbieWasserman-Schultz (FL): Yes or no. LouisDeJoy: I disagree with the premise. Rep. DebbieWasserman-Schultz (FL): I'm not asking you anything otherthan, reclaiming my time Madam Chair. Yes or no? MadamChair Reclaiming her time, yes or no answer. Rep.Debbie Wasserman-Schultz (FL): Yes or No. Have any plantmanagers across the country in the USPS requested mail sortingmachines be reconnected. Louis DeJoy: How would Iknow that? Rep. Debbie Wasserman-Schultz (FL):You're in charge? You don't know whether there are there are plantmanagers that have requested. Louis DeJoy: No Idon't know that. Rep. Debbie Wasserman-Schultz(FL): But let me let me just assure you that there areplant managers that was reported in the in the press in bothWashington. There are plant managers in Texas and Washington. And Ihave articles that I can show you that have asked to have sortingmachines reconnected and brought back online. And they've been tooscared to come forward to say so. So you've you've indicated thatit's local leadership in this hearing, I heard you say it's notyour job to decide whether the sorting machines are brought onlineor not. Someone needs to mute Madam Chair. Madam Chair, please,please mute. Madam Chair People that arelistening, please mute. Rep. Debbie Wasserman-Schultz(FL): I probably I need probably about additional 30seconds from the interruptions added back onto my time, please. Youhave said in this hearing, it's both not your job to make decisionsabout sorting machines, and at the same time, you've said thatyou're not going to bring them back online because they're notneeded. It can't be both.
3:40:50Louis DeJoy: Across the country, our employeeavailability is down three, 3 to 4% on average across the country,but the issue is in some of the hot spots in the country areas likePhiladelphia, Detroit is probably 20, the averages cover that andthat could be down 20% and that's given us this, contributing tothe delivery problem that we're having.
3:49:50Louis DeJoy: I had nothing to do with the with thecollection boxes, the sorting machines, the postal post officehours or limiting overtime, the change I made was asked the team torun the trucks transportation on time and mitigate extra tripsbased on a review of an OIG audit that was absolutely astonishingin the amount of money we were spending and the number of latetrips and extra trips we were running. It was a plan that wasrolled out with operations in is very, very important aspect of thenetwork. It's a very people ask why do trucks matter? Why did ontime trucks matter? They do matter. It's a fundamental premise ofhow the whole mail network is put together. If the if the trucksdon't run on time, the mail carriers can't leave on time they'reout there at night. They have to come back and get more mailcollection processes or late, plant processes distorted. I seeseveral billion dollars in potential savings in getting the systemto connect properly. And that's why we ran out and put a plantogether to really get this fundamental basic principle. Run yourtrucks on time. I find it really... I would not I would not knowhow to reverse that. Now, what am I to say? Don't run the trucks ontime. Is that the answer that we're looking to get me to say heretoday?
3:58:50Rep. Jackie Speier (CA): Mr. Duncan, you've alsobeen active in President Trump's campaign. And as a director ofAmerican Crossroads superpac. Is that correct? RobertDuncan: I'm the director of American Crossroads Super PAC.Yes. Rep. Jackie Speier (CA): And you'vecontributed over $1.9 million to President Trump's campaign.Robert Duncan: That's not correct. Rep.Jackie Speier (CA): Not you personally but the PAC.Robert Duncan: I don't know the answer to that.Rep. Jackie Speier (CA): Well, the records showthat.
4:02:20Louis DeJoy: Before I went into... In the PostalService, you file your forms the day you arrive at work, I filed myforms. I was going to a meeting on Amazon, I owned stock someplacein a call at Morgan Stanley, and I was...that they told me I had toeither recuse myself from reviewing a number of contracts or sellthe stock. I called our broker to sell the stock. We actually hadcalls. Rep. Jackie Speier (CA): Mr. DeJoy, I'mgonna have to Louis DeJoy: but I did not buyoptions. I actually bought call calls that Rep. JackieSpeier (CA): It's on your statement. LouisDeJoy: I bought covered calls back and at a loss. That'swhat I did to get completely out of stock. I had to unwind coveredcalls. Rep. Jackie Speier (CA): You still havethose calls, do you not? Louis DeJoy: No, I had topay more money for the calls than I sold them for. I think youshould get an understanding of what a covered call is before youaccuse me of any improprieties.
4:49:00Louis DeJoy: We got to this specific change. Theproduction schedules within the plants were not aligned with thetransportation schedules going between the plants. About 10% of themail was not aligned. The production plants were getting done lateand the trucks were leaving. And this was not a mandate that everytruck leaves on time, we still have a significant amount of trucksthat run delayed and a significant amount of extra trips. Judgmentswere made at each individual plant that provided for transitionalissues and doing it. We will get this back. We're working very hardand it will be a successful endeavor for the United States PostalService.
4:52:20Rep. Alexandria Ocasio-Cortez (NY): Mr. DeJoywhen, when your announcement in your new position as PostmasterGeneral was announced, you know, there was some folks that wereflagging concerns that you would be the first Postmaster General intwo decades without previous experience or service directly in theUSPS. But to be fair, and as you mentioned, you do have extensivecareer experience in supply chain logistics, correct? LouisDeJoy: I do. And in fact, you serve the CEO of your ownsupply chain company new breed logistics for 30 years, correct?Louis DeJoy: I did. And that was up until about2014 when you merged new breed logistics with another company XPOlogistics were you also served as CEO for a year and then served onits board of directors until about 2018 when you submitted yourresignation. Correct? Louis DeJoy: Yeah.
5:10:40Rep. Rashida Tlaib (MI): On June 24th 2020, youbought between 50,000 and 100,000, in what you refer to as, quotecovered calls in the Amazon Corporation. But let's be very clear,Mr. DeJoy, no matter what financial maneuvering you performed totry to hide it. The fact is that you have financial interest inAmazon. So Mr. DeJoy, yes or no? Are you aware that Amazon uses theUS Postal Service for 40% of its shipping? LouisDeJoy: I disagree with the premise that I bought stockand... Rep. Rashida Tlaib (MI): Do you know that40% of its shipping? Louis DeJoy: I know there's alot of shipping with us. Yes. Rep. Rashida Tlaib(MI): Okay. And I understand it. Your Amazon covered callsexpires in about October of this year. So you'll have to make adecision regarding this financial interest and may potentially havesensitive information about Amazon's business with the US PostalService which may influence that decision. This appears to be aclassic example of conflict of interest, insider trading. Yes orno, will you commit right now. divest any and all financialinterest in Amazon to avoid illegal insider trading. LouisDeJoy: Ma'am that was a lot of time on an issue thatdoesn't matter. I don't own any Amazon stock. Rep. RashidaTlaib (MI): You have financial interest. You can call itwhatever you want. Louis DeJoy: I don't ownanything with Amazon. You can continue to... Rep. RashidaTlaib (MI): Until you do that. Your financial interest inAmazon will continue to be problematic and illegal and a conflictof interest.
5:16:25Rep. Katie Porter (CA): Did you actually read andindependently analyze the major overhaul plans before you orderedthem to take effect? Louis DeJoy: Again, I willrepeat that I did not order a major overhaul plans, the items youidentify were not directed by me. I did. And we don't need muchanalysis to get to run your trucks to a schedule. Rep.Katie Porter (CA): Reclaiming my time. Mr. DeJoy, couldyou please tell me who did order these changes if he U.S.Postmaster General did not because these changes have resulted inand you have set yourself in this hearing. LouisDeJoy: The Postal Service has been around for 250 years.There were plans there were many, many executives, almost 30,000executives within the organization, and there are plans thatexisted prior to my arrival that were implemented. Rep.Katie Porter (CA): Mr. DeJoy If you did not order theseactions to be taken. Please tell the committee the name of who did.Louis DeJoy: I do not know. Rep. KatiePorter (CA): Mr. Joy Did you analyze these plans beforethey went into effect? US Postmaster General supervise whoever didapparently... Louis DeJoy: As I've stated numeroustimes the plans were in effect and being implemented before Iarrived. Rep. Katie Porter (CA): Mr. DeJoy, do youtake responsibility for these changes? LouisDeJoy: I take responsibility from the day I sat in a seatfor any service deterioration that has occurred. You're askingabout operational changes that go on throughout the wholeorganization around the around the country. Rep. KatiePorter (CA): I'm reclaiming my time sir. Mr. DeJoy, willyou commit to reversing these changes. LouisDeJoy: No.
5:19:25Rep. Katie Porter (CA): Do you own any financialinterest, whether options or stocks covered calls, bought or sold?Do you own today any financial interest in Amazon? LouisDeJoy: I do not.
5:20:55Rep. Mike Quigley (IL): You've accepted theresponsibility for the delays. But we're still not clear whatexactly what changes took place and what were yours. Under MissLawrence's questioning. You said you stopped the pilot program.When you stopped everything else. Let me ask you, what in yourmind, were you stopping besides the pilot program? LouisDeJoy: I stopped the removal of collection boxes aroundthe country. I stopped the process of reducing hours at postalretail centers and I stopped the removal of the flat and mailsortation boxes, machines. Rep. Mike Quigley (IL):So, your argument for doing that is that you saw... that it wasn'tworking or? Louis DeJoy: No they... I met withwith with the speaker and Senator Schumer and we just collectivelythought about the heightened discussion that was going on aroundthe nation. Rep. Mike Quigley (IL): Andrespectfully, Sir, why that and not the overtime issues and not thesorting machines? Why did you pick those and not the others whichseem to have pretty dramatic impacts? Given the fact that thingsdidn't go well, wouldn't you want to look back coming from theprivate sector and say, gee, maybe that is impacting us negatively.Was there some other reason you're thinking, well, no, I'm notgoing to change those. Louis DeJoy: Not changedtheir truck schedule and the... Rep. Mike Quigley(IL): The overtime, the sorting machine over time.Louis DeJoy: I've spent $700 million and, we havespent 700. Rep. Mike Quigley (IL): You recognizethat there are many including in my district, post office locationswhich are cutting back on overtime. They're following somebody'sorder in and you won't mention who that is. So back toaccountability, you got to admit your own it right. LouisDeJoy: How do you know that they're cutting back onovertime? Rep. Mike Quigley (IL): Imagine or letme put it another way. Are you certain that they're not cuttingback on overtime? Louis DeJoy: The direction wasgiven to stop cutting back on overtime in postal retail centers.Rep. Mike Quigley (IL): When was that done?Louis DeJoy: I haven't done an audit yet. But Iwould believe they're pretty compliant. Rep. Mike Quigley(IL): Wait, when was that order given? Was that part ofthe order you just talked about? Louis DeJoy: Idon't know what you're asking. Rep. Mike Quigley(IL): Are you saying when you stopped everything else, itincluded the overtime issue as well. Louis DeJoy:There was no directive to reduce overtime anywhere within theorganization. Rep. Mike Quigley (IL): And are youcertain that no one was cutting back on overtime. LouisDeJoy: No, I'm not certain that's part of the problem atthe Postal Service, sir. That's what I'm trying to get my handsaround there was a lot of... And that's why I did thereorganization. Rep. Mike Quigley (IL):Respectfully, you can imagine, though, that... LouisDeJoy: There's a lot of judgment made in local areas thatis not a normal... Rep. Mike Quigley (IL): You'rebeing selective on what you're taking credit for and not and acynical person could say, you're just trying to avoid going beforethe regulatory body, because these aren't changes. But when yourown, as you say, you're Republican, when your own party says, didyou stop these changes? You said yes. And in your documents, youtalk about the fact that there were changes. You can't have it bothways. There were changes. You seem to have a line there that youdon't want to have, because it means you have to go before theregulatory board and you don't want to do that. LouisDeJoy: It sounds like... Rep. Mike Quigley(IL): It sounds like what happened. LouisDeJoy: It sounds like a weak theory to me.
5:24:50Rep. Mike Quigley (IL): Have you communicated withanyone in the administration? Since you were considered for thisspot about how to operate? USPS? Louis DeJoy: No.Rep. Mike Quigley (IL): No one has communicatedwith you who works in any way with the Trump administration. Andyou haven't communicated in any way with anyone who works in theTrump administration or the Trump campaign about how to operatepost office. Louis DeJoy: The only time Icommunicated with someone in the Trump administration was SecretaryMnuchin, when we were negotiating, negotiating the terms of the $10billion note and my discussion in general, it was early on in myarrival in generalities were that I think that we have someopportunities here, looking to try and grow revenue, improveservice and get some cost out. Rep. Mike Quigley(IL): And what was the direction the other way?Louis DeJoy: There was no direction. My PostalService's mind to run there was no direction. Rep. MikeQuigley (IL): My time has expired.
Hearing: Examining the Finances and Operations of the United States PostalService During COVID-19 and Upcoming Elections, Senate HomelandSecurity and Governmental Affairs Committee, August 21, 2020
Witnesses:
- Louis DeJoy: Postmaster General
Transcript:
12:30Louis DeJoy: Our business model established by theCongress requires us to pay our bills through our own efforts. Iview it as my personal obligation to put the organization in aposition to fulfill that mandate. With action from the Congress andour regulator, and significant effort by the Postal Service, we canachieve this goal. This year, the Postal Service will likely beported loss of more than $9 billion. Without change, our losseswill only increase in the years to come. It is vital that Congressenact reform legislation that addresses our unaffordable retirementpayments. Most importantly, Congress must allow the postal serviceto integrate our retiree health benefits program with Medicare.
18:45Louis DeJoy: We deliver to 433 million pieces ofmail a day. So 150 million ballots 160 million ballots over acourse of a week is a very, very small amount adequate capacityplus mail volume is down as you said 13-14% this year.
20:45Louis DeJoy: Today there is about 140,000collection boxes out in the United States. Over the last 10 years,about 30... averages about 3500. So 35,000 of them have beenremoved and it's a data driven method I have I haven't reviewed itbut every year they look at utilization of post boxes, they look atwhere they place new post boxes, they look at where communitiesgrow. So 35,000 over 10 years. Since my arrival, we moved 700 postcollection boxes, of which I had no idea that that was a process.When we found out, when I found out about it, we socialized it hereby some of the leadership team and looked at the excitement it wascreating, so I decided to stop it, and we'll pick it up after theelection.
33:58*Rep. Scott Peters (CA): Are you limiting overtimeor is that being suspended right now and people will work overtimeif necessary to move the mail out efficiently every single day.Louis DeJoy: Senator, we've never eliminatedovertime. Rep. Scott Peters (CA): It's beencurtailed significantly is what I understand. LouisDeJoy: It's not been curtailed by me or the leadershipteam here. Rep. Scott Peters (CA): It's beencurtailed significantly. It's gone down. It's been limited. Willyou commit to... Louis DeJoy: Since I've been herewe've spent $700 million on overtime. Overtime runs 13% rate beforeI got here and it runs at a 13% rate now.
35:00Rep. Scott Peters (CA): Will you be bringing backany mail sorting machines that have been removed since you becomePostmaster General, will any of those come back? LouisDeJoy: There is no intention to do that. They're notneeded, sir. Rep. Scott Peters (CA): So you willnot bring back any processors. Louis DeJoy:They're not needed, sir.
35:30Rep. Scott Peters (CA): Did you discuss thosechanges or their potential impact on the November election with thepresident or anyone at the White House and remind you you're underoath? Louis DeJoy: I have never spoken to thePresident about the Postal Service other than to congratulate mewhen I accepted the position. Rep. Scott Peters(CA): Did you speak or discuss any of these changes withSecretary Mnuchin? Louis DeJoy: During the duringthe discussion in negotiating the note, I told him I'm working on aplan. But I never discussed the changes that I may, to set up,working on a plan for to the to improve service and gain costefficiencies. But no grave detail other than that, that was aboutit.
38:08Rep. Scott Peters (CA): You have your word thatyou're not going to mandate that states send out any ballots usingeither the more expensive first class mail, and will you continuethe processes and procedures to allow election mail to move asexpeditiously as possible and treated like first class?Louis DeJoy: Yes, sir. We we will deploy processesand procedures that advance any election mail in some cases aheadof first class mail.
1:01:15Louis DeJoy: Like take the Alaska bypass plandiscussion that's an item on a table, that's an unfunded mandate.It costs us like $500 million a year. And what I asked for was allthe unfunded mandates, right? That's a way for us to get healthy.Pay something for the unfunded mandates. If we just throw 25billion at us this year, and we don't do anything, we'll be back intwo years. If then maybe we should change the legislation and notmake us be self sustaining.
1:55:50Louis DeJoy: They're inside the plants. There's aproduction schedule for mail that would meet, that's set up to meeta dispatch schedule for trucks that gets tied to a destinationcenter for, let's just say keep it simple go right to the deliveryunits where carriers go out in the morning and carriers then couldcome back at night. This whole thing is in a lined schedule intheory on paper, and there's lots of imbalances that we werefinding as we went through this process, but the big thing to tryand get everything aligned around is that transportation schedule.And now we have taken that up and all that mail that was going leftwell that was on that truck was also late mail. Right now we haveadvanced the mail we just some of the mail that coming off theprocessing lines. We found these imbalances and we did not as greata job as we shouldn't recovering for it, but we will. I'm seeingimprovements right now. Once that comes together now we'll bemoving around the country at 97% on time and I'm very, very excitedand committed to trying to do that. And that, again, enables us tobalance the front end and the back end, the delivery end of thesystem and saves us all that money that you saw in the in the auditreport and it's it's in billions, not millions.
1:58:45Louis DeJoy: This this is very doable, FedEx andUPS do it.
Hearing: Congressional Progressive Caucus to Hold Ad-Hoc Hearing on Attackson the U.S. Postal Service, Congressional Progressive Caucus,August 20, 2020
Witnesses:
- David Williams: Former Inspector General of the USPS and formerVice Chairman of the USPS Board of Governors
- Mark Dimondstein: President of the American Postal WorkersUnion
- Tammy Patrick: Senior Advisor at the Democracy Fund Voice
Transcript:
17:00David Williams: I recently resigned as the vicechairman of the postal Board of Governors when it became clear tome that the administration was politicizing the postal service withthe Treasury Secretary as the lead figure for the White House inthat effort. by statute, the Treasury was made responsible forproviding the postal service with the line of credit. The Treasurywas using our responsibility to make demands that I believe wouldturn the Postal Service into a political tool in its long history,as an apolitical public infrastructure.
17:45David Williams: Clearly the President wasdetermined that the postal service should inflict harm on Amazondelivery by sharply raising parcel shipping prices on everyone by400% or more.
18:30David Williams: The President eventually admittedthat he was withholding COVID-19 relief funds from the PostalService so that it could not reliably enable voting in his upcomingelections.
18:40David Williams: The Treasury Secretary alsoinsisted that all republican appointees on the board of governorsand the Postal Regulatory Commission come to his office and kissthe ring and receive his blessing before confirmation. Thiscontinued context with him away from the full board continuedissuing orders and expressing his approval and disappointment intheir performance.
19:00David Williams: The Secretary was keenlyinterested in labor agreements, postal pricing increases, andespecially volume discounts being given to Postal Service's largestcustomers Amazon and UPS and FedEx. The Postal Service replied tothe early demands from the Secretary, explaining the two provisionshe was asking for were illegal, but the concerns were ignored.
19:30David Williams: Ironically, the actual fiscalconcern was not whether the Postal Service could zero out its $15billion line of credit. The Postal Service keeps a huge cash onhand account. They could always pay off all our most of that loan.The real concern was that the Treasury had borrowed and spent our$300 billion pension and retiree health Fund. The interest rate setby Treasury for itself was so low that the funds were dying. As thefunds been invested in a retirement fund, the liability would befully covered by now.
20:30David Williams: Additionally, post offices shouldbe allowed into related business lines and become a singleneighborhood point of access for government services that cannot beput online. Postal carriers going to every door can providepersonalized services to challenged and elderly Americans thatwould enable citizens to live in their own homes independently.Post offices and carriers can also support and resupply the newarmy of workers that are officeless, are working at home, whileproviding work opportunities to those living in rural areas.
21:45David Williams: I recently resigned as the ViceChairman of the Postal Board of Governors when it became clear tome that the administration was politicizing the postal service withthe Treasury Secretary as the lead figure for the White House inthat effort. By statute, the Treasury was made responsible forproviding the postal service with the line of credit. The Treasurywas using our responsibility to make demands that I believe wouldturn the Postal Service into a political tool in its long history,as an apolitical public infrastructure.
23:30Mark Dimondstein: But our ability to reliablycontinue to serve the people and serve the country is under threatin several ways. First and most urgently is the effect of thepandemic on a Postal Service's finances. The sharp economiccontraction that began in March also affected the mail. Letter mailis contracted over 30%. And even with a surge in package volumes,the postal service projects because that won't list the postalservice projects it will suffer $50 billion of lost revenue overthe next 10 years directly due to COVID and will likely face a cashshortfall as soon as March of next year. Simply put, because theUnited States Postal Service normally runs its operations with zerotax dollars, that pandemic related lost revenue places thecontinuity of a central Postal Service is at serious risk andthat's why we've worked so hard along with so many others to securea minimum of 25 billion in emergency COVID relief and it's backingthe bipartisan unanimous request to the postal Board ofGovernors.
24:30Mark Dimondstein: June 2018. The White HouseOffice of Management budget report openly called for theprivatization of the Postal Service. White House task force thatfollowed later that year did suggest slowing down the mail cuttingdelivery services restricting union rights for workers anddrastically raising packages.
39:30David Williams: After my arrival I had asked andothers expressed interest in gaining assurance that the postalservice would be able to respond to normal levels and enhancedlevels of voting by mail. And actually, if an entire state wantedto vote primarily by mail, we received a formal ???, that theconfidence level could not be higher that the Postal Service couldperform this task and deliver this volume of of mail transactions.They were in the process and nearly completed, briefing each of thestates and the voting, the Secretary of State, explaining to themhow the flow would work. If they needed a postmark, helping themunderstand how to get a postmark on their letters. We were told thecapacity was always good, but it was especially good now becauseduring the COVID crisis, the degree of advertising mail and othermail had fallen. And so this would give us plenty of capacity. Andthey said their experience was great. They'd been handling overseasmilitary mail, a more complicated process for years, and that hadgone well. Several states were already voting by mail that had gonewell. And they felt they were had forever provided absentee votingprocess. And so we felt we felt very good about it at that time,and that was quite recent.
41:15David Williams: The board interviewed severalfirms that managed and handled talent. We selected RussellReynolds, and they began developing a number of candidates. Weheard their names and rather late in the process I heard for thefirst time. Mr. DeJoy's name. It came through one of the governorsand he had somehow, Mr. DeJoy come to his attention. They had lunchtogether and he wanted to move his name forward. It wasn't clearhow the governor had met Mr. DeJoy to me and I don't think anyonewas clear on it from the presentations. Rep. Mark Pocan(WI): And who was the member of the board of governors whoproposed Mr. DeJoy's name? David Williams:Governor John Barger, he was leading the search, his committee wasleading the search.
43:30David Williams: Actually, it predates the latest$10 billion expansion, goes back to our routine original $15billion line of credit. Secretary Mnuchin indicated that he wantedto have some say in how the Postal Service ran as sort of being incharge of providing that that account. I don't think that had beendone before. It was normally if Congress assigned you thatresponsibility, you perform the responsibility. He indicated hewould like to impose this through the use of terms and conditionson the $15 billion line of credit. We then received shortly afterhe announced this verbally, we then received the draft terms ofagreement. They were very interesting and I hadn't seen anythinglike it before. He wanted to approve price changes. laboragreements. And perhaps most disturbingly, the very sensitivenegotiated service agreements with our largest customers, Amazon,UPS, FedEx and some others. He also was urging that we adopt apricing methodology called fully allocated cost methodology. Thatwas something that the United Parcel Service had been advocatingfor a very long time. I think all of us felt that perhaps UPS thatinfluenced him in advocating for that, and it would be really in aruinous to the postal service to adopt. No one would adopt it,certainly not not UPS themselves, FedEx or Amazon. It would preventcompetition in the market where the Postal Service has been gainingmarket share.
45:45David Williams: Also General Counsel sent a lettersaying that the transfer of our duties and decision makingauthority to him was illegal. The Treasury went forward notwithstanding that. My position was that when they arrived, weshould simply refuse that another department cannot impose its willon another department and the federal government. In addition tothat, we're an independent entity, and so it was especiallyegregious.
46:15Rep. Pramila Jayapal (WA): Let me ask you aboutPostmaster General DeJoy's independence to run an agency when hehas significant financial conflicts of interest. He holds at least$30 million in stock and a postal service contractor FBO, and heowns stock and Postal Service competitors, Amazon and ups. So hestands to make enormous profit. If use of the Postal Service goesdown and privatization increases, and he is now responsible forslowing mail delivery right now. Can you provide insight into howthat happened and whether a normal background check was wasinstituted in this situation. David Williams: Whenit became clear that he was a serious candidate and then obviousthat he was the person about to be selected, we did discussconducting a background investigation of him. None was conducted asof the time I left and I believe that was the night before hisselection or two nights before selection.
50:45Raskin: Do you know why he was selected?David Williams: I don't.
51:30David Williams: It looked like there were concernsabout whether his company was building correctly and performingfully. Those are often wrong, but I think they they sometimes arecorrect. That contract file needs to be examined, we need to gothrough whether the Postal Service demanded that he returned anymoney or any concerns they had with a performance, that's a verynormal kind of examination. And I don't mean to say there werethere were valid problems, but this would suggest that anexamination should be done.
57:00Rep. David Cicilline (RI): With respect to yourresignation, you resigned because it was your determination thatwhat the Postal Service was being asked to do, as a condition of aline of credit, which we included in the CARES Act, thoseconditions were included, those were developed by Mr. Mnuchin in aneffort to control the Postal Service, is that right? DavidWilliams: Yes, I was concerned that the Board of Governorswas running an independent organization and instead it had becomepoliticized and the decision making was largely transferred to theSecretary of Treasury.
57:45Rep. David Cicilline (RI): You were the InspectorGeneral and you were the Vice Chair of the Board of Governors. Haveyou ever seen or heard in the history of the post office thiseffort by the President or the executive branch to intrude and takeover the operation of the US Postal Service? DavidWilliams: No, sir. I've never seen anything like that.
59:30Mark Dimondstein: Overtime was running between 15and 20%. Some of that just the ebbs and flows of mail. Some of itsthat were generally short staffed and they need to hire. And someof it's the pandemic. We've had almost 3,000 people who have testedpositive for COVID. We've had 40,000 people quarantined sinceMarch, when that happens. And of course, we've had all thechildcare challenges with schools closing. So leave usages up andthe overtime is partly used to make up for that and to justarbitrarily come in and say 15 to 20% of the hours of work.However, they're going to work at higher overtime, some combinationof the two, but eliminate 15 to 20% of the hours of work, but thework is still there simply means that the work won't get done,backing up, and we've had evidence, we have pictures of parcelssitting there for over a week, they were just never sorted. Andthat's the mail that belongs to people this country.
1:07:15David Williams: I was a appointee for bothRepublican and Democratic administrations. Rep. Mark Takano(CA): Which administrations, if you don't mind.David Williams: Bush, Clinton, as you said, thecurrent president, and then then I also continued service duringseveral other administrations.
1:08:30Rep. Mark Takano (CA): So President Trump didappoint you to the Board of Governors, is that correct?David Williams: He did.
1:09:30David Williams: The removal of the 25 billionhappened at the 11th hour after everyone was on board. SecretaryMnuchin removed it personally at the very 11th hour. Rep.Mark Takano (CA): So let's be clear. The Board ofGovernors appointed by the president requested $25 billion to getthrough a pandemic, a decline in revenues. That was what was theBoard of Governors best estimate of what you would need. Is thatcorrect? David Williams: Yes, sir.
1:18:00Tammy Patrick: Do we know that the majority ofvoters who vote by mail return their ballots by dropping them in anofficial Dropbox for the elections office?
1:22:45Tammy Patrick: Let's go out at two differentrates, first class and marketing mail and marketing mail used to becalled standard and the delivery timeframes didn't used to be thatfar apart. It used to be first class mail was one to three days,standard mail or marketing mail was more like three to five days.So that was really a question of one or two days difference. Butbecause ballots were going out with the logo, they were getting thefirst class service for a discounted rate, which I will say manyelection officials felt was their right under the National VoterRegistration Act, which talks about discounted rates for electionmaterials that are used for voter registration. And any ballot thatgets returned undeliverable, as addressed gets used to update thevoter rolls. So we do know that that the states that traditionallyuse that marketing mail rate are the western states that have highvolumes of vote by mail. And they have just as recently as thislast week for the primaries that have happened in Washington,Arizona. Millions of ballots went out at marketing mail rates, theydid not see a decrease in delivery. They did not see delays. Thelocal Postal Services are telling election officials whether it'sthe secretaries of state or county recorders or registrar's orauditors, that they will get that mail through on time. So I'm notas worried about that part of it. The part I'm concerned about isthe message that it gets to the voter. And whether or not the voteris going to still believe local officials all across the countryhave told me in the last week, the number one thing they're doingis answering the phone with concerns from voters who have put in anapplication to get a ballot by mail, and now are worried that theyshouldn't have done that.
1:27:15David Williams: There are a couple of very oddaspects to this pullback. One is you don't save money by breakingdown machines and putting them away and storing them you spendmoney. So that was a very odd action normally the reason to keepthose machines and plants in place or in the event of a Katrina ora 9-11, or the election or the COVID crisis, removing those isthinning out the Postal Service's ability to redirect mail in theevent of an act of an incident like that. The blue boxes were maybethe most interesting of all, though, those were not part of ongoingclaims. To my knowledge. As a matter of fact, Secretary Mnuchinwanted that done. His study of the Postal Service asked that it bedone. I asked the Postal Service about it and they said it wouldn'tsave anything and there would be no reason to remove those.
1:29:15David Williams: The service scores are probablythe best objective measure and those are significantly off. Whereeven though there's less mail, it's moving more slowly. Much moreslowly. That's strange and disturbing.
1:33:30Rep. Ted Lieu (CA) I also want to follow up onyour comment today about Treasury Secretary Mnuchin. Is the PostalService under the Treasury Department. DavidWilliams: I know that, I certainly know that the terms andconditions that originally came over moved all the importantdecision making from the board to him. I don't know the presentcase. I don't know presently if that was successful orunsuccessful.
1:35:00Rep. Andy Levin (MI): Did you participate in anyinterviews of other candidates for Postmaster General at this timeround? David Williams: I did. Rep. AndyLevin (MI): How many candidates were interviewed, do youknow? David Williams: I'm gonna have to estimatebut I believe it was in the low teens. Rep. Andy Levin(MI): Were any of the other candidates qualified for thejob as far as you could tell, did they all need to be assisted intheir answers? The way you describe it where a member of the Boardof Governors like helped them complete their answers as with Mr.DeJoy. David Williams: There was nothing likethat. There were good candidates. Rep. Andy Levin(MI): And so Mr. DeJoy was really the only candidate whostood out to you as someone who was not qualified or capable, or inany event, he stood out. David Williams: I wouldsay that, I would say that's correct.
News Conference: US Postal Service and Mail-in Voting, U.S. Capitol, August 18,2020
News Conference: Trump opposes election aid for states and Postal Service bailout,threatening Nov. 3 vote, White House, The Washington Post,August 12, 2020
Virtual Summit: Secretary Mnuchin on Coronavirus Pandemic and ReopeningEconomy, The Hill, May 21, 2020
Hearing: Postal Service Reform, House Oversight and Government ReformCommittee, Feb 7, 2017
Witnesses:
- Megan J. Brennan: Postmaster General
- Robert Taub: Chairman of the Postal Regulatory Commission
- Lori Rectanus: Direction or Physical Infrastructure issues atthe US Gov’t Accountability Office
- Arthur Sackler: Manager at the Coalition for a 21st CenturyPostal Service
- Fredric Rolando: President of the National Association of LetterCarriers
Transcript:
1:50:35Rep. Elijah Cummings (MD): Taking all theserequirements and trends together, the Postal Service reported a netloss of $5.3 billion for fiscal year 2016, which represents a 10thconsecutive year of net losses. We have repeatedly discussed thedeteriorating financial condition at the Postal Service in thiscommittee, but the situation is now worsened by unprecedented lackof any Senate-confirmed members on the Postal Service’s Board ofGovernors. Because many key management decisions are reserved bystatute to the Senate-confirmed board members, there are manyactions, such as establishing rates, class, and fees for products,that the Postal Service simply cannot take now.
45:30Fredric Rolando: Over the past decade, postalemployees have worked diligently to restructure operations, cutcosts, and sharply increase productivity, in response totechnological change and the Great Recession. Despite the loss ofmore than 200,000 jobs, we’ve managed to preserve our networks andto maintain our capacity to serve the nation. But only Congress canaddress our biggest financial challenge: the unique andunsustainable burden to pre-fund future retiree health benefitsdecades in advance. No other enterprise in the country faces such aburden, which was imposed by legislation in 2006. The expense ofthis mandate has accounted for nearly 90% of the Postal Service’sreported losses since 2007. Without a change in the law, themandate will cost $6 billion this year alone.
Hearing: PostalService Reform, Senate Homeland Security and GovernmentalAffairs Committee, September 26, 2013
Witnesses:
- John Hegarty: National President of the National Postal MailHandlers Union
- Dean Baker: Co-Director Center for Economic & PolicyResearch
Transcript:
33:40Sen. Tom Carper: Much as the auto industry isright sized itself over the last half dozen or so years, what thePostal Service is attempting to do is to right size the enterprise,and we're trying to not be an impediment. But actually to help youdo that. If you go back a dozen or so years ago, your workforce ithink is Postmaster General said is about 800,000 people today,it's just under 500,000. If you go back about a half dozen yearsago, my recollection is the number of postal processing plants inour country was about 600. We're now down to roughly three, threeand a quarter.
46:40Sen. Tom Coburn: If you look at the privatesector. The benefits per employee, average $10,589. At the stateand local government level, it's $16,857. At the federal level,it's $41,791. And that's a significant fact we need to bear in mindas we ask the postal service to be competitive.
1:59:30John Hegarty: 300 processing plants have beeneliminated in the past five years, and the employee compliment hasbeen reduced by more than 300,000. Postal employees have alreadycontributed to and sacrificed for the financial turnaround of thePostal Service. My members have had their wages frozen for the pasttwo years, and employee contributions have increased for bothhealth insurance and retirement. About 20% of postal employeesincluding more than 5000 members of my union are working in noncareer part time jobs at reduced pay rates. And thousands ofemployees have been involuntarily excessed or transferred to otherwork locations often hundreds of miles away and have had to uproottheir homes and their families because of the closings andconsolidations of the postal network. Last week, the PostmasterGeneral testified that the Postal Service has reduced cost by $16billion during the past few years. As a labor intensive serviceindustry, it should be clear that most of those savings have comefrom postal employees.
2:20:50Dean Baker: Just think it is striking I hadoccasion to be in on one of the mediation hearings back in 2011. Ilooked at the Postal Service's projection at that time, they'reprojecting revenue falling to just 63 billion as of 2013. Andcontinuing to decline over the rest of the decade. So it'd be about59 billion by the end of the decade, we're now looking at revenueof 66 billion. So in fact, there's been really a quite remarkableturnaround. We're looking at a system that does look as though it'squite viable, apart from these retiree obligations. So it's not asthough we have an ailing system on its last legs. It looks verymuch as though we have a system that in principle is viable. That'ssuffering very much from I would say at least, an excessive burdenin requiring it to pre fund at a very rapid rate.
Hearing: Financial State of U.S. Postal Service, Senate HomelandSecurity and Governmental Affairs Committee, August 6, 2009
Speaker:
- John Potter - Postmaster General
- David Williams - Inspector General the US Postal Service
Transcript:
46:10David Williams: The Postal accountability andEnhancement Act of 2006 requires the postal service to make 10annual payments of $5 billion each in addition to the $20 billionalready set aside for pre funding its retiree health benefits, thesize of the $5 billion payments has little foundation and thecurrent payment method is damaging to the financial viability ofthe Postal Service even in profitable times. The payment amountswere not actuarially based instead, the required payments werebuilt to ensure that the Postal Act did not affect the federalbudget deficit. This seems inexplicable since the Postal Service isnot part of the federal budget, does not receive an appropriationfor operations and makes its money from the sale of postalservices. The payment amounts are fixed through 2016 and do notreflect the funds earnings. Estimates of the Postal Serviceliability as a result of changing economic circumstances, decliningstaff size or developments in health Care and pharmaceuticalindustries. The payments do not take into account the PostalService's ability to pay and are too challenging even in normaltimes.
1:04:45John Potter: We hit our maximum number of careeremployees in late 1999. We had 803,000 career employees. We havebeen addressing the diversion of mail to electronics and have beenmanaging our workforce very aggressively. Today we have 630,000career employees. So we've managed to reduce that working withunions and within the contracts reduced by over 170,000 people, thenumber of employees we have.
1:10:10John Potter: And when I look around the world andsee what other posts are, if you're in Australia and you want toupdate your driver's license, renew it, you go to the post office.If you're in Italy and you go into a bank, more than likely goingto the post office, if you're in Japan and you want to buyinsurance, more than likely you're going to the post office. And ifyou're in France and you have a cell phone issue, more than likely,again, you're going to the post office.
Hearing: PostalService Reform, Senate Governmental Affairs Subcommittee onInternational Security, Proliferation and Federal Services, May 13,2002
Speaker:
- John Potter - Postmaster General
Transcript:
11:00John Potter: Today, we're experiencingextraordinary declines in mail volume, and resulting losses andrevenues. Our projected volume declined for this year, we'll bemore than 6 billion pieces of mail below last year. That's thelargest volume decline ever experienced in a single year. Despitethis decline, we are working to reduce our net loss below ourearlier projections. To achieve this, we will reduce the number ofcareer employees through attrition by 20,000 people this year. Inaddition, we will cut over 60 million work hours compared to lastyear and we are postponing program expenditures and delayingcapital investments. The net effect of these actions will reducecurrent planned expenses by $2 billion. Those savings combined witha $1 billion dollar infusion of revenue from the earlyimplementation of the rate case means our projected net loss forthe year will be in the range of $1.5 billion, instead of whateasily could have been a loss of $4.5 billion.
16:05John Potter: Essentially, the Postal Service couldbecome profit driven, generate returns to finance capital projects,instead of increasing our debt load, introduced flexible pricingbased on market demand, and develop better relationships with ouremployees. These and other long term changes to transform thepostal service can only come with legislative reforms.
1:30:00John Potter: Today we have the same number ofpeople in the postal service as we had in 1991. But since 1991, thenumber of possible deliveries we have, the number of households andbusinesses that we've served, has gone up 15.4 million. So everyday, six days a week, we're at 15.4 million additional doors thanwe were in 1991. And we have some 33 billion more pieces ofmail.
1:50:35John Potter: There is a process today to pay downour debt, but there's some $12 billion that we may have by the endof this fiscal year. It's built into the rate process. It's prioryear loss recovery. Today, there is no vehicle to consider thehealth benefit liabilities, or the retirement obligations as partof the rate setting process. So, the vehicles that are available tous today are basically to cut our costs.
Hearing: Main Street Lending Program,CONGRESSIONAL OVERSIGHT COMMISSION, April 5, 2002
Speaker:
- John Potter - Postmaster General
Transcript:
13:30John Potter: For some people, the preferred modelis privatization. But this group, the notion of equitable serviceis not relevant. The simple straightforward answer goes back towhat our stakeholders, the people, we reached out to told us.Overwhelmingly, they told us, there was no support for privatizingthe nation's mail service. A privatized model would focus onprofit. The results might be delivery standards and prices dictatedby where a person lives, or where a business is located.Metropolitan areas where volume is greater, would receive better orcheaper service than a rural community. The privilege might standto benefit from privatization, but not everyday people. It might befine for a lawyer in Los Angeles, but not for the sales clerk inOmaha. Let me be very clear on this point. Do not, do not intend torecommend that the Postal Service be privatized. I do not believethat the American people want a privatized mail delivery system inthis country today. People speak of digital divide, we don't need adelivery divide.
16:15John Potter: Commercial government enterprise.This is our recommended model, the one we believe would put thepostal service on a more businesslike footing, while keeping itdedicated to its mission of universal service. But it's also amodel that is markedly different from what we have today. Forexample, instead of breaking even, our financial goal would be togenerate reasonable returns. Earnings would finance capitalprojects, instead of having to resort to increasing our debt load.Retained earnings would carry us through tough economic times,instead of always resorting to rate increases. In addition, thismodel will allow us to leverage our vast retail and delivery assetsto develop new revenue streams. Our 38,000 retail offices, and ournational door to door delivery networks could be made available toprivate enterprise as a joint profit making venture. As acommercialized government enterprise, we could introduce flexiblepricing. Prices for postal products would still be subject toregulatory review. But we would have the flexibility to adjustprices based on market demand. Next, as a labor intensiveorganization, with 75% of our operating expenses going to labor,this business model will allow us to explore a more progressive wayto make collective bargaining work for all parties. Finally, thismodel will give us the needed flexibility to increase access andconvenience to our customers. We will be able to add more locationswith long arounds management without the flexibility to close anumber of non performing retail outlets and we will be able toinvest in new facilities and services. And enter into alliances andventures with related private sector companies after due diligencewas completed. Essentially, this commercialized Postal Service willgive us the management tools that are available to privatecorporations to improve service to our customers manage costs moreefficiently, and leverage our assets to generate new revenueopportunities.
Cover Art
Design by Only Child Imaginations
Music Presented in This Episode
Intro & Exit: Tired of Being Lied To by David Ippolito (found onMusic Alley by mevio)