U.S. Postal Service gets boost to overhaul its finances and modernize

The U.S. Postal Service has secured a major victory that will keep it afloat and address service delays that have plagued the agency in recent years. President Biden on Monday signed a sweeping bill into law that will overhaul the agency's finances and allow it to modernize. But there are still questions about its future. Jacob Bogage, of the Washington Post, joins Geoff Bennet to discuss

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  • Judy Woodruff:

    Between shrinking budgets and the COVID-19 pandemic, the United States Postal Office has endured a turbulent few years. Now lawmakers are pushing — or rushing, that is — to salvage the essential agency.

    Geoff Bennett has more.

  • Geoff Bennett:

    The U.S. Postal Service has secured a major victory which will keep it afloat in and address service delays that have plagued the agency in recent years.

    President Biden signed a bill into law that will overhaul the Postal Service's finances and allow the agency to modernize its service. But there are questions about the future of Postal Service operations and the leadership of an agency that millions of Americans rely on each day for everything from prescriptions to paychecks.

    Jacob Bogage covers the U.S. Postal Service for The Washington Post.

    It's good to have you with us.

    And, Jacob, as you know, this new law comes after years of increasing warnings about the state of the agency's finances. President Biden said when he signed this bill into law that the Postal Service will be on sustainable and stable financial footing moving forward.

    Explain to us how that will work.

  • Jacob Bogage, The Washington Post :

    So, what this bill does is it frees the Postal Service from $5 billion annual payments. And a lot of those payments, it hasn't been able to make for more than a decade.

    The Postal Service is required to pay its retirees' health care costs in advance. That's because it's a physical job. You're sorting and moving mail. It's a lot of driving. You're getting in and out of a car or a truck every day. You're walking around city blocks. It's a difficult job.

    And so they make $5 billion payments annually that they just don't have the money to pay for, because, we as a country, don't send enough mail anymore to keep the Postal Service afloat that way.

    So, this bill wipes clean a lot of those payments and gives the Postal Service the financial flexibility to make investments and modernize for the years to come.

  • Geoff Bennett:

    And, yet, on the same day the president signed this bill into law giving the Postal Service, to use your phrase, financial flexibility, the agency announced another series of price hikes.

    Why? What accounts for that?

  • Jacob Bogage:

    The Postal Service, generally speaking, does not get funding from Congress. It has to subsist on the sale of postage products.

    If, we, as a country, don't send as much mail, it has got to find ways to make up that revenue. And the way it's choosing to do that, Postmaster General Louis DeJoy is choosing to do that, is to raise the price of a stamp.

    Come July, it will go from 58 cents to 60 cents for a first-class stamp, and then, for a postcard, from 40 cents to 44 cents. So, these are large — relatively speaking, large jumps.

  • Geoff Bennett:

    You mentioned the postmaster general, who you actually recently interviewed.

    What did he tell you about his strategic plan and how he plans to implement it?

  • Jacob Bogage:

    Sure.

    I think the important thing — the important takeaway from that conversation is, regardless of what your opinions are about delivery speed or delivery price, the Postal Service's network has to compete with private sector logistics — logistics companies.

    And in the consumer space, that's FedEx and UPS and Amazon. Its network is simply not set up to do this right now. It's the stuff that consumers don't see. It's the stuff that folks on Capitol Hill don't see and don't want to talk about. And it is uncomfortable. It is consolidating processing plants. It is monetizing or making more efficient mail delivery routes, things that are really going to create some turmoil in the organization.

    But whether Louis DeJoy was the guy to do it or not, this is something that needed to be done for the Postal Service's worthiness for the 21st century.

  • Geoff Bennett:

    Yes.

    What is DeJoy's future? As you mentioned, he's a controversial figure. He's a major Republican donor. Democrats accused him of deliberately trying to slow the mail in the run-up to the 2020 election, when there was an overreliance on mail-in ballots. Yet President Biden doesn't have the authority to remove him directly. That authority rests with the Board of Governors.

    Give us a sense of the current makeup of the Board of Governors and what that suggests about DeJoy's future.

  • Jacob Bogage:

    This is, as you alluded to, Geoff, a more complicated question than a lot of folks realize.

    So, Louis DeJoy serves at the pleasure of the Board of Governors. It's a nine-member board. It's bipartisan. It's appointed by the president, so members there now were appointed by both President Biden and President Trump, confirmed by the Senate.

    But, even as Democrats take control of the board, Louis DeJoy is not going anywhere. He still enjoys enough support to remain in office. And, I should say, even as the White House has continually expressed a lack of confidence in the postmaster general, they are leaning more and more heavily on the Postal Service for different parts of the administration's goals.

    And I think the best example of that is the COVID test kit program. They have sent 320 million COVID test kits to Americans all over the country. I have gotten four test kits myself. That is noteworthy that, even though they say they don't have confidence in Louis DeJoy as the postmaster general, they are enthusiastically using his agency in the pandemic response.

  • Geoff Bennett:

    Yes, such a great point.

    Jacob Bogage covers the U.S. Postal Service for The Washington Post.

    Jacob, a pleasure to speak with you, as always, friend.

  • Jacob Bogage:

    Thanks, Geoff.

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