Big changes are coming to the U.S. Postal Service

For the better part of 14 years, United States Postal Service advocates have been warning that without change, America’s most beloved agency would be doomed. The warnings reached a fever pitch last year as an election cycle in the midst of a deadly pandemic brought a new wave of attention to the importance of the institution.

And now, finally, big changes are hurtling toward the Postal Service. And they’re coming from multiple directions: the White House, Congress, and Postmaster General Louis DeJoy himself. In the next few months, the institution will likely undergo radical change.

But insiders remain weary. Their message: The United States Postal Service just can’t seem to win, even when it does.

Over the past decade, union leaders and other advocacy groups have fought to overturn a congressional mandate that required the USPS to pre-fund future retiree health benefits on a 50-year schedule, instead of on a pay-as-you-go basis. The burden, which union leaders call “draconian” and which no other governmental agency or private business bears, costs an extra $5 billion per year and has led to consistent revenue losses for the previously profitable and self-funded service. Nearly 90% of the agency’s losses between 2007 and 2016 came from the pre-funding requirement, according to former Postmaster General Megan Brennan.

Now it appears that there’s widespread bipartisan support to overturn the law, which was backed by the Bush administration during a lame-duck session with the intent of using the extra money from pre-funding to pay down the ballooning national debt.

In a rare show of bipartisan unity this month, Republicans, Democrats, union advocates, researchers, and the Postmaster General all agreed that the pre-funding requirement should be overturned. During a congressional hearing on the matter, Oversight and Reform Committee chairwoman Rep. Carolyn Maloney indicated that a bill cementing the change was imminent and that it would also grant the agency permission to pursue other pathways toward revenue, like providing banking services, to make up for a decline in first-class mail.

President Joe Biden also announced three nominees to fill vacant seats on the Postal Service’s board of governors. If approved by the Senate, this would make Democrats and Democratic appointees the majority on the nine-member board. They would have the voting power to fire Postmaster General Louis DeJoy, a Trump appointee and longtime supporter of the Republican Party, and could nix any of DeJoy’s proposed changes to the structure of the Postal Service.

Biden’s nominees—Anton Hajjar, former general counsel of the American Postal Workers Union; Amber McReynolds, the chief executive of the National Vote at Home Institute; and Ron Stroman, former deputy postmaster general and adviser on the USPS for Biden’s transition team—would bring years of experience to a board of governors that is largely composed of financial types who did not work directly with the Postal Service ahead of their appointments. They would also bring diversity to the board, which is currently composed entirely of white men.

The prospect of an imminent end to the reign of DeJoy, who has publicly supported the privatization of parts of the Postal Service, and the forthcoming release of the pre-funding burden are both huge wins for proponents of a fully public and profitable Postal Service. But union leaders and other advocates aren’t resting on their laurels. In fact, they’re doing quite the opposite.

The conventional wisdom might be that Biden has nominated Democrats who will use collective American anger over the recent slowdown in mail and package delivery (only 38% of first-class mail was delivered on time at the end of 2020) to immediately rid the agency of DeJoy. But that wisdom is wrong, at least on any immediate timetable, insiders say.

DeJoy doesn’t plan on going anywhere: He warned Congress earlier this month that the American public had better “get used to me,” and he appears to be eschewing sweeping congressional action, instead asking for support for his own plan to restructure the Postal Service. Testifying before the House Appropriations Subcommittee on Financial Services and General Government on Thursday, he asked Congress for more money to help his yet-to-be-released restructuring plan for the United States Postal Service, while admitting that it would slow mail delivery times.

DeJoy’s ask came alongside an attempt to temper expectations of “what it is that we’re able to do” in the face of financial losses. He told lawmakers that he would stop using planes to fly first-class mail across the country and would end another category of first-class mail that promised a speedy delivery.

“We cannot go to California from New York in three days without going on planes, and we don’t own planes,” he said.

His plan will also reorganize the USPS’s geographic reporting structure, which experts say will further slow delivery and lead to more red tape.

It will take some time for an already overloaded Senate to get to approving Biden’s nominees, and DeJoy’s plan—which needs to be approved by the board of governors—is expected to be released in the next two weeks. A Democratic majority on the board doesn’t necessarily mean big change, either. Ron A. Bloom, the current Democratic chairman of the USPS board of governors, who previously served in the Obama administration, has signaled to Congress that he supports the plan and much of DeJoy’s work.

It’s not a given that board members will vote out DeJoy based on party affiliation alone.

This was DeJoy’s second congressional testimony in three weeks, as legislators contemplate introducing their own policy changes to the ailing Postal Service.

During the hearing, DeJoy sent mixed messages: He apologized three times for slow mail delivery over the holiday season, but when asked to grade himself on his performance, he went with an A for “bringing strategy and the planning and effort to here.”