The House of Representatives reconvened for a rare Saturday session, passing legislation to address concerns about the U.S. Postal Service. The bill would provide $25 billion in emergency funds to shore up the U.S. Postal Service and halt any changes to the agency’s operation until after the November presidential election.
The vote came just one day after the USPS’s newly appointed boss, Postmaster General Louis DeJoy,
testified before a Senate committee on Friday, reassuring lawmakers that his agency could handle the expected influx of mail-in ballots.
Still, Democrats moved forward with the vote, which passed on Saturday with 257 in favor and 150 against. House Democrats voted unanimously for the bill, with 26 Republicans also voting yes.
The bill reflects Democrats’ concerns that delivery delays could affect millions of Americans and the November election held during the coronavirus pandemic.
The bill appeared unlikely to move through the Republican-controlled Senate, though. Senate Majority Leader Mitch McConnell said on Friday that concerns over the mail-in ballots was a “nonexistent problem.” He didn’t say whether the Senate would schedule a vote on the bill. The White House threatened to veto the bill on Friday evening.
The debate about funding and cost cuts for the Postal Service has heated up lately. Speaker Nancy Pelosi of California called the House back earlier this week from its August recess to vote on a bill blocking some cost cutting at the Postal Service——an effort by DeJoy to overhaul the financially struggling organization and
curb its longtime losses.
Though it is a government entity, the modern post office functions as a self-sustaining business that raises funds through postal products, not from taxpayers.
The cost cuts have led to delays in mail delivery, as well as the removal of some mailboxes and mail-processing equipment. Democrats are worried that DeJoy—a Trump donor appointed to the postmaster general role in May—is making changes in order to hinder the Post Service’s ability to deliver mail-in ballots in time for the November election. Last week, the USPS announced it would suspend those costs reductions until after the election.
“Don’t pay any attention to what the president is saying because it’s all designed to suppress the vote,” Pelosi said before Saturday’s vote.
The Postal Service warned in July that mail-in ballots may not arrive at election offices in time to be counted if they are sent near Election Day. Election rules in many states do not allot enough time between when ballots need to be requested and returned, the agency says. This had added another layer of uncertainty ahead of the high-stakes presidential contest.
The Postal Service lost $2.2 billion in its most recently reported quarter. Despite the surge in package delivery volume thanks to the exploding e-commerce ordering from homebound consumers, the volume of mail——including first-class and marketing-mail——has fallen faster than expected.
Congress allocated $10 billion in funding for the USPS under the Cares Act, its Covid-19 stimulus plan, to help offset the damage from the pandemic. More funding is being considered as part of another stimulus bill, but the Congress failed to reach agreement before the August recess and those talks have been halted.
Investors have found opportunity in the post office’s struggles, bidding up shares of
FedEx (ticker: FDX) and
United Parcel Service (UPS). The two logistic giants have seen rising package volumes this year due to the pandemic. If the USPS raises prices to fix its financials, more shipping would likely shift to competitors. UPS and FedEx shares are up 64% and 69%, respectively, over the past three months, while the
S&P 500 has gained 14%.
