What's really happening with the mail
"Neither snow nor rain nor heat nor gloom of night stays these couriers from the swift completion of their appointed rounds."
But what about Postmaster General Louis DeJoy?
This month, DeJoy will begin implementing a plan that will fundamentally alter the core mission of the United States Postal Service (USPS) — the rapid delivery of first-class mail. Many of the letters, bills, small parcels, and other documents sent through first-class mail will take much longer to arrive at their destination.
Prior to October 1, all domestic first-class mail was supposed to arrive at its destination in one to three days. Under the new standard, 31 percent of first-class mail is now subject to a new standard of four to five days. Only mail sent to locations within a three-hour drive is expected to arrive within two days.
For some people, this won't be an issue. They've already shifted much of their essential communication online. But many people have not. People "in rural areas, the disabled and the elderly" will be hit especially hard. While everything in the world keeps getting faster, essential aspects of their lives will now slow down.
A related effort by DeJoy that slowed down mail in 2020 "snarled everything from prescription medication to election ballots." Slow mail can result in "delayed checks, credit card penalties, ...missed court appearances" and other issues. It also makes mail-in voting, which Trump has falsely asserted is a vehicle for significant election fraud, more difficult to execute.
The idea behind the slowdown, of course, is to save money. DeJoy's plan will limit the use of planes to deliver first-class mail and instead rely on ground transportation. This shouldn't come as a surprise. DeJoy, a prominent fundraiser for Trump and other Republicans, had no experience with the USPS before being appointed Postmaster General in May 2020. DeJoy did, however, spend 31 years as the CEO of a trucking company, New Breed Logistics, before selling it to XPO Logistics in 2014 for $615 million.
But how much money will the USPS save after it implements DeJoy's plan to slow down first-class mail? Very little. By DeJoy's own estimate, slowing down the mail dramatically will save just $169.5 million annually. That represents "less than a quarter of one percent of the total FY 2020 operating expenses of $82 billion."
This $169.5 million savings estimate includes an acknowledgment that slowing down the mail will make it less useful for people. The $279.6 million in savings on transportation is offset by a revenue reduction of $110.1 million due to decreased volume. In other words, when you make the mail slower, people stop using it. Those who continue to rely on first-class mail will still do so because they have no other options.
But even these estimated savings may be exaggerated. The Postal Regulatory Commission (PRC), an independent agency that exercises oversight over the USPS, found "the estimated cost savings may be inflated" and "several underlying assumptions appear untenable." Specifically, the "estimated cost savings are based on an outlier year (FY 2020) when costs and modes were in flux compared to prior years" because of the pandemic. The PRC concluded that even if the USPS' estimate pans out, the savings would not result in "much improvement, if any, to the Postal Service’s current financial condition."
Most of the USPS' financial woes stem not from using airplanes to transport first-class mail but a legal requirement imposed by Congress in 2006 that requires the USPS to pre-fund 75 years of retiree health benefits. No other government agency (and few private companies) operate this way. Without that pre-funding requirement, "the USPS would have consistently reported operating profits instead of losses." Repealing the requirement would require action from Congress.
So what's this all about? DeJoy's plan states that is part of an overall effort to "participate more fully in the strengthening U.S. market for package delivery services." In other words, DeJoy wants to spend less time in the declining first-class mail market and participate in the potentially more lucrative package delivery market. This would make perfect sense if the USPS was a private company looking to maximize its profits.
But the USPS is "a public agency with a public service mission." By law, that mission includes "prompt, reliable, and efficient services to patrons in all areas" including "rural areas, communities, and small towns where post offices are not self-sustaining."
DeJoy, however, has other priorities.
The appearance of conflicts
Throughout DeJoy's tenure as Postmaster General, there have been questions about whether he was using his position to benefit himself, his family, or his friends in the private logistics industry.
In August, for example, the USPS awarded XPO Logistics, the firm that bought DeJoy's company and employed DeJoy after the sale, a contract worth "$120 million over the next five years." Since becoming Postmaster General "DeJoy, DeJoy-controlled companies and his family foundation have divested between $65.4 million and $155.3 million worth of XPO shares." But "DeJoy’s family businesses continue to lease four North Carolina office buildings to XPO, according to his financial disclosures and state property records." Those leases "could generate up to $23.7 million in rent payments for the DeJoy businesses over the next decade."
A USPS spokesperson said "that DeJoy did not participate in the procurement process for the XPO contract" and "DeJoy is recused from any matters involving XPO."
While DeJoy has apparently complied with formal ethics requirements, not everyone is satisfied. “There’s no question he’s continuing to profit from a Postal Service contractor,” Virginia Canter, the chief ethics counsel at Citizens for Responsibility and Ethics in Washington, said.
The federal campaign finance investigation
DeJoy became known to Trump's political team as a prominent donor and fundraiser. DeJoy personally donated "$1.1 million to Trump Victory, the joint fundraising vehicle of the president’s reelection campaign and the Republican Party." But DeJoy's effort to encourage others to donate to Republican candidates has prompted an FBI investigation.
In September 2020, the Washington Post reported that DeJoy's fundraising was "bolstered for more than a decade by a practice that left many employees feeling pressured to make political contributions to GOP candidates — money DeJoy later reimbursed through bonuses, former employees say." Five employees who worked with DeJoy at New Breed Logistics say "they were urged by DeJoy’s aides or by the chief executive himself to write checks and attend fundraisers at his 15,000-square-foot gated mansion." Afterward, according to the Washington Post's sources, "DeJoy would instruct that bonus payments to staffers be boosted to help defray the cost of their contributions."
DeJoy has angrily denied the allegations, but the FBI is investigating whether they constitute illegal "straw donations." Under federal law, you are not permitted to reimburse someone for a political contribution. DeJoy himself has been subpoenaed for information.
Why is DeJoy still around?
The Postmaster General is not appointed by the president. Rather, the position is selected by the USPS Board of Governors. The board decides how long each Postmaster says in the position. At the time of DeJoy's appointment, there were six members of the board — all of whom were appointed by Trump. Biden recently filled three vacancies on the board, but Trump appointees still hold a 6-3 majority. And, thus far, they seem loyal to DeJoy.
Biden can fire and replace members of the board, but only for cause. Some Democrats are calling on Biden to remove the Trump-appointed board members so that new members can oust DeJoy. But it's unclear whether any of the Trump-appointed board members have done anything that would justify their removal.
Still, even without ousting board members, DeJoy supporters could soon be in a minority on the board. Of the six Trump-appointed members, one "is a holdover member whose term ended last year, and the term of another expires in December." If Biden replaces those vacancies with new appointees that have a different vision for the USPS, DeJoy's days could be numbered.