USPS Head DeJoy Facing Heat from Congress on Agency Changes

The U.S. House of Representatives voted in favor of a $25 billion relief package for the beleaguered U.S. Postal Service on Saturday, a measure not expected to pass muster in the GOP-led Senate, as the agency’s new head is undergoing intense scrutiny in Washington over changes he is initiating.

Postmaster General Louis DeJoy faced repeated fire from Congressional critics during an at times combative Senate committee hearing on Friday. Criticism was mostly related to charges DeJoy is intentionally trying to sabotage mail-in voting during a presidential election year, in the midst of the coronavirus pandemic, by removing postal boxes and sorting equipment.

“There have been no changes to any policies with regard to election mail,” DeJoy told the Senate Homeland Security and Governmental Affairs Committee, according to the New York Times. “The Postal Service is fully capable and committed to delivering the nation’s election mail fully and on time.”

At least 20 state attorneys general have filed lawsuits against some combination of President Donald Trump, DeJoy and USPS Board of Governors Chairman Robert Duncan. In both cases the defendants claim the USPS acted illegally in making changes to mail operations without approval from the Postal Regulatory Commission (PRC).

DeJoy and former postal officials have said removing postal boxes and sorting equipment had already been approved prior to his appointment in June and were standard steps in response to the rapid decline in mail volumes. He faces more fire today from a House committee.

Last week, DeJoy said in light of the firestorm over voting by mail he was suspending a number of changes until after the election. These included cutting overtime hours for mail carriers, which could result in packages being held over for the following day’s delivery, as well as postal box and sorter equipment removal. There have been numerous reports of a falloff in USPS delivery performance in recent weeks.

On Saturday, the House passed the $25 billion relief package for the cash-strapped USPS in a 257-150 vote, with 26 Republicans voting in favor. The measure also called for a rollback of DeJoy’s postal reforms, including limiting overtime and facility hours.

In his opening remarks before the Senate panel on Friday, DeJoy noted that the USPS is projecting a $9 billion loss this year, for a cumulative loss of $70 billion since 2007, a trend that will continue without major reforms.

“It is vital that Congress enact reform legislation that addresses our unaffordable retirement payments,” DeJoy said, referring to prefunding of healthcare benefits required under a 2006 postal reform act. “Most importantly, Congress must allow the Postal Service to integrate our retiree health benefits program with Medicare, which is a common-sense practice followed by all businesses that still offer retiree health care.  It must also rationalize our pension funding payments.”

He also brought up the issue of USPS pricing, which President Trump has also pounded on, saying it too needed reform. Earlier this month, the USPS announced its first-ever peak surcharges for the upcoming holiday season, expected to  generate mountains of ecommerce deliveries.

“The Postal Regulatory Commission began a mandated review of our pricing system four years ago,” DeJoy said. “It has been three years since the commission concluded that our current system is not working. The lack of action is astonishing. We urgently require the PRC to do its job and establish a more rational regulatory system for our mail products.”

In its most recent quarter ended June 30, the USPS lost $2.21 billion, down from $2.26 billion a year earlier. Its so-called controllable loss, after backing out workers’ compensation adjustments and unfunded retiree health benefits, rose from $1.1 billion to $1.5 billion. Shipping and package revenue increased 53.6% or $2.9 billion to $8.3 billion, on a volume increase of 50% or 708 million pieces.