Trump confirms that he is considering using an emergency loan to exert more control of the cash-strapped US Postal Service
Trump confirmed Washington Post reporting that his administration is considering using a $10 billion emergency loan as leverage to require the cash-strapped US Postal Service to make big changes. The CARES Act, the $2 trillion stimulus package passed by Congress last month, includes $10 billion in additional borrowing power subject to approval by the US Treasury Department. Top Trump administration officials are considering requiring the Postal Service to charge higher rates on its package delivery services and weaken the authority of powerful postal service unions. On Friday, Trump called the Postal Service "a joke" and suggested that the Postal Service quadruple the rates they charge for shipping packages if they want federal government assistance. Visit Business Insider's homepage for more stories.
In Friday comments to reporters, President Donald Trump confirmed a Thursday Washington Post report that the administration is considering using a $10 billion emergency loan as leverage to require the cash-strapped US Postal Service to make big changes to its structure and management. The Postal Service, which doesn't take taxpayer funding and operates based on the postal fees it charges, has been particularly hard-hit by the decline in mail caused by the coronavirus crisis. The CARES Act, the $2 trillion stimulus package passed by Congress last month, includes $10 billion in additional borrowing power subject to approval by the US Treasury Department. Now, Trump and Treasury Secretary Steve Mnuchin, want to use the promise of the loan to force the agency to implement long-sought-after changes, multiple sources told the Post. Both Trump and Mnuchin have previously quashed efforts to provide emergency relief to the Postal Service. In his Friday bill signing of a new $500 billion relief package, Trump called the Postal Service "a joke" and confirmed the Post's reporting, suggesting that the Postal Service quadruple the rates they charge for shipping packages if they want federal government assistance, the Post's Phil Rucker reported. The Post said that Trump administration officials are considering requiring the Postal Service to charge higher rates on its package delivery services, exerting greater control of the selection of top postal service officials, and weakening the authority of powerful postal service unions that represent thousands of employees around the country as conditions for approving the loan. In total, the changes would shift much of the decision-making power over the Postal Service's management and business operations away from the agency's Board of Governors and the Postal Regulatory Commission to the Treasury Department. The Post stressed, however, that none of these concessions are finalized since the Postal Service has not officially asked for the $10 billion loan included in the CARES Act. Representatives for both the Postal Service and the US Treasury Department confirmed to the Post that while the agencies are in early talks on what the conditions for the loan could look like, officials haven't formally agreed on any terms. House Oversight Committee Chairwoman Carolyn Maloney and Rep. Gerry Conolly, who runs the subcommittee that oversees the Postal Service, sounded the alarm a month ago that the agency could run out of funding altogether by June if Congress doesn't act. "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," the two said in a March 23 joint statement, calling on Congress to appropriate $25 million in emergency funds to the agency. On April 9, Postmaster General Megan Brennan told lawmakers that the massive expected decline in mail volume is expected to cause losses of up to $13 billion this year. He estimated that the agency wouldn't be able to continue providing reliable service and pay its over 600,000 person workforce by September without immediate help. The agency's Board of Governors is now requesting $25 billion to help the agency deal with the immediate consequences of the pandemic, $25 billion in grant money to help it adapt, and an additional $25 billion in borrowing authority, CBS News reported. But Trump, who has vocally criticized the way the USPS is structured and the rates they charge, is actively opposed to any measures to help the Post Office. He refused to sign the CARES Act if it included a bailout for the agency, the Washington Post reported on April 11. "We told them very clearly that the president was not going to sign the bill if [money for the Postal Service] was in it," an administration official told the Post. "I don't know if we used the v-bomb, but the president was not going to sign it, and we told them that." The Post reported that while Congress initially intended to give the Postal Service a $13 billion grant, Treasury Secretary Steve Mnuchin stepped in to quash it, telling lawmakers, "you can have a loan, or you can have nothing at all." Connolly told the Federal News Network in March that the $10 billion in credit "is, frankly, a meaningless gesture. It's a slap in the face, and it's not what they need ... they don't need more debt capacity, they need debt forgiveness." Trump has frequently criticized the Postal Service for, in his view, not charging high enough rates to compete with e-commerce giants like Amazon for package delivery, or charging enough in its contracts with private logistics companies like FedEx and UPS to deliver packages to "last mile" areas. But as the Post noted, USPS raising its package delivery rates could make it more difficult for them to compete with Amazon and other shipping companies like UPS and FedEx, hurting their financial state in the long run. The significant decline in Americans using the Postal Service during the COVID-19 outbreak is only exacerbating existing financial woes, which were manufactured in part by Congress. The agency is especially burdened by 2006 legislation that required the agency to pre-fund 75 years' worth of employee pensions in advance. The service saw its annual losses double to $8.8 billion in 2019, and currently has $11 billion in outstanding debt. Read the full story at the Washington Post>>SEE ALSO: Bank of America says Amazon is the No. 4 largest delivery company in the US — here's how its network compares to UPS, USPS, and FedEx Join the conversation about this story » NOW WATCH: Here's what it's like to travel during the coronavirus outbreak
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