House Democrats: USPS faces imminent crisis due to coronavirus outbreak

Washington Postal Scene By Bill McAllister

In the face of the coronavirus COVID-19 outbreak, Democrats in the House of Representatives are warning the United States Postal Service is facing a crisis this summer because of “a critical fall-off in mail across the country.”

Rep. Carolyn B. Maloney, D-N.Y., chairwoman of the House Committee on Oversight and Reform, and Rep. Gerry Connolly, D-Va., chairman of the Subcommittee on Government Operations, issued the warning March 23 after their party introduced legislation “to save the Postal Service from imminent bankruptcy as a result of the coronavirus crisis.”

The two Democrats issued a press release March 23 declaring that “The Postal Service is in need of urgent help as a direct result of the coronavirus crisis.”

The press release said: “Based on a number of briefings and warnings this week about a critical fall-off in mail across the country, it has become clear that the Postal Service will not survive the summer without immediate help from Congress and the White House. Every community in America relies on the Postal Service to deliver vital goods and services, including life-saving medications. The Postal Service needs America’s help and we must answer this call.

“According to the Postal Service it is facing a potentially drastic direct effect in the near term on mail volumes and could be forced to cease operations as early as June.”

That would have “grave consequences across the country,” the press release said, noting that the USPS delivered “more than a billion shipments of prescription drugs last year, and that number is expected to grow rapidly as a result of the coronavirus crisis.”

The Democrats urged their colleagues to give the USPS a $25 billion emergency appropriation and wipe out the agency’s $11 billion debt to the Department of the Treasury.

They also called for legislation that would require the USPS “to prioritize medical deliveries and allow it flexibility to meet crisis conditions.”

Paul Steidler, a senior fellow at the Lexington Institute, a think tank in Arlington, Va., issued a caution to Congress about the proposal to help the Postal Service.

“The action needs to be taken and is not unexpected,” he said in an article posted March 24 on the Lexington Institute website.

“Unlike many entities, however, the USPS’s financial problems started well before COVID-19,” Steidler said.

The Postal Service has been on a watch list of troubled government agencies since 2009, he noted.

Steidler also pointed out that Congress has failed to take any action to reform the USPS despite repeated warnings of its financial woes.

He urged that Congress make loans instead of grants to the USPS and insisted on structural reforms being promptly made to address some of its biggest problems.

Steidler also urged that Congress not forgive the agency the $11 billion it owes the Department of the Treasury.

“While forgiving some debt might be reasonable in a ‘grand bargain’ of Postal Reform, forgiving the debt now just further kicks the can down the road,” he concluded.

Robert Fisher, who runs a consulting service on postal finance issues, said he found the idea that the USPS could become insolvent this summer “shocking.”

“It all just doesn’t add up,” he said in a telephone interview.

February financial numbers showed the Postal Service was having financial results close to what the agency had predicted.

The coronavirus should impact the agency’s revenues but not enough by mid-March to topple the agency’s cash reserves and throw it toward insolvency, he said.

“The numbers don’t make sense to me,” Fisher said, citing numbers in the House Committee on Oversight and Reform press release.

The massive relief bill that cleared the Senate March 25 did not contain the postal provisions that the House Democrats had sought.

That brought a cry of anguish from Connolly.

“Somehow the Postal Service is not worthy of any financial assistance in the midst of this crisis,” Connolly said in a story published March 26 on the Washington Post website.

“It’s to me an outrageous situation. We could have completely returned the Postal Service to solvency and got it started back on its feet and guaranteed continued uninterrupted service to the American people during this crisis and beyond,” he said.

“We’ve decided we’re going to help well-healed industries that have connections, and we’re going to let the Postal Service hang in the wind,” Connolly said.

While rejecting the House Democrats’ efforts to give cash relief to the USPS, the Senate bill did raise the Postal Service’s debt limit by $10 billion.

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