Election Year Politics Brings Renewed Focus on USPS
As the nation is watching the latest in political developments ahead of the fall elections, an issue is emerging that the nonprofit community understands well — the viability and financial health of the United States Postal Service.
The ANA Nonprofit Federation has long been advocating for the preservation of a healthy and viable USPS due to the need for direct mail stability for charitable organizations that rely on this valued government agency. Although most organizations have diversified their outreach beyond postal for years, one of the most effective means to reach donors is through the mail. It is the lifeblood for millions of nonprofits and their supporters, and it must be protected.
New scrutiny is leading to calls for additional funding to buttress the government agency. These funds are necessary because of the need to use the USPS for voting this fall due to the pandemic and because the agency has been losing billions of dollars over many years. The fear is that the USPS is underfunded, overburdened and not capable of handling a national election. For nonprofits, the added fear is that their vitally important year-end campaigns will be caught in the political and pandemic whirlwind.
Here is a snapshot of the key issues.
The new Postmaster General Louis DeJoy is facing intense pressure from Democrats who fear his leadership and ties to President Trump could lead to a weaker and less capable USPS. DeJoy also faces additional scrutiny due to political donations made by his employees that may have violated the law, and more about those allegations is currently being discovered. Such intense scrutiny of a PMG is unusual but not unexpected as the mailbox is seen as the safest way to vote and avoid in-person lines during the pandemic. Democrats are seeking $25 billion in funds for the USPS as part of the House’s version of a pandemic relief bill while Republicans seek a separate bill regarding the USPS not tied to pandemic relief.
The USPS has already received pandemic relief funding earlier through a $10 billion loan and has sufficient liquidity for now. However, for the long-term, pandemic relief legislation is not advancing as the House and Senate cannot come to an agreement on basic provisions — targeted relief or a larger bill that tackles added issues. For now, the USPS is not making any changes to its operations until after the election, as promised by DeJoy. Expect more push and pull by the political parties as the election proceeds and then the attention may dwindle.
Rates and Finances
The USPS has announced a temporary rate increase from October 18 to December 27 for its commercial shipping products (Priority Mail, Priority Mail Express, First Class Package Service, Parcel Select, Parcel Return Service) ranging from 4% to 12% in order to generate additional revenue. The January 2021 postal rates for mail classes will carry increases tied to the Consumer Price Index per the legal requirement instead of large hikes of the past. However, the mailing community is fearing larger increases based on potential changes in the rate-setting process due to a 10-year review conducted by the independent Postal Regulatory Commission; these may go as high as double digits over five years if the process is changed.
Meanwhile, USPS’s finances are unsteady. Third quarter figures show a loss of $2.2 billion, while revenue is up by $500 million and its costs are up $470 million. The agency continues to face an uphill financial battle due to statutorily mandated obligations to pre-pay retiree health benefits, an area that must be addressed in postal reform legislation. This is due to a $72 billion fund requirement in the 2006 Postal Accountability and Enhancement Act. No other agency has this obligation. If the USPS did not have this mandate, the USPS financials could be at break even or better. Changing this requirement will not occur before the election, but continues to be a priority to save the USPS.
Due to the pandemic, the USPS workforce has had the same issues as other major employers, dealing with employees who contracted the virus and the ripple effect across its workforce. The agency cannot work remotely, and it deserves credit for delivering mail to every household as an essential service during a difficult and challenging time. Instead of public gratitude, the USPS is facing even more intense review to reach targets more quickly at a time when it was already reducing workforce due to mail volume declines. As a result, mail delivery has been a challenge due to an increase in package volume and a reduction in its workforce. The USPS will be providing updates regarding postal service to the House of Representatives on a weekly basis, but not publicly.
The USPS is essential and must be supported. The nonprofit mailing community remains incredibly dependent on the mail for donations and communications, and we support a strong and viable USPS through this unprecedented era for the mail system.
As the internal General Counsel for the DMA division of the ANA, Ms. Boone leads the organization’s efforts in ethics, compliance and best practices for the data-driven marketing community. She has over 25 years of communications law experience spanning the range of marketing and fundraising issues. She manages Board-level Committees on DMA’s ethical guidelines, the policing of members’ compliance with the guidelines, and reviews best practices with marketing practitioners. She leads educational efforts on topics of interest on corporate & social responsibility, and works with DMA members on marketing and fundraising compliance. Since 2002, Boone leads the DMA’s Nonprofit Federation (DMANF) of nearly 400 nonprofit organizations and fundraisers before Congress, state and federal regulatory bodies to protect charitable speech. Since 2012 she helps oversee the DMA’s Email Experience Council, an organization of responsible email marketing practitioners. Prior to DMA Boone worked on behalf of newspaper publishers on media policy and communications law issues at the National Newspaper Association.
Boone has a Juris Doctor from Catholic University in Washington, D.C. and a B.A. in Journalism cum laude from Temple University in Philadelphia, Pennsylvania. She is an adjunct professor on marketing ethics at Georgetown University’s School of Continuing Studies. She is a member of the District of Columbia Bar & New Jersey Bar.
Mrs. Boone was honored as a “Top Woman in Fundraising” by Fundraising Success Magazine in 2006. She resides in Southern Maryland with her husband and daughter. Boone is a classically trained ballet dancer.