April 13, 2018

President Trump Orders Task Force on United States Postal System

Last evening, President Trump issued an order forming a task force to evaluate the state of the U.S. Postal Service and make recommendations for changes within 120 days, which would be mid-August. The Press Release is provided below. The Task Force will be headed by the Secretary of the Treasury, in his role as head of the Federal Financing Bank,  and include the Secretaries of the Office of Management and Budget and Office of Personnel Management, as well as other government officials deemed appropriate.

The Task Force is intended to arrive at a sustainable business model for the USPS by taking a very comprehensive look at:

• the expansion and pricing of the package delivery market and the USPS’s role in competitive markets;

• the decline in mail volume and its implications for USPS self-financing and the USPS monopoly over letter delivery and mailboxes;

• the definition of the “universal service obligation” in light of changes in technology, e‑commerce, marketing practices, and customer needs;

• the USPS role in the U.S. economy and in rural areas, communities, and small towns; and

• the state of the USPS business model, workforce, operations, costs, and pricing.

We wrote extensively in our February 18 Alliance Report that everyone seems to agree that the current USPS business model is flawed, but no one has come up with a workable, comprehensive new model for the Postal Service. A new, improved business or public service model needs to decide what we want the Postal Service to do and how will we pay for it. The most extreme example of a flawed approach is the current Postal Regulatory Commission proposal to solve the USPS financial shortfalls with only one tool: massive rate increases for captive customers. And the PRC proposed these increases without realistic analysis of how they will affect mail volume. The Alliance of Nonprofit Mailers is an active participant in the proceeding.

While such a comprehensive evaluation envisioned by this order is called for, the difficulty is always how to implement any recommendations. Government commissions and task forces are notorious for kicking the can down the road by producing nice reports that do not lead to action. The President must work with Congress to effect many changes through legislation, but he also has the power to appoint nine postal Governors who would drive change from within the organization.

We will be keeping you posted on the work of the task force.

Best,

Stephen Kearney

Executive Director

THE WHITE HOUSE

Office of the Press Secretary

FOR IMMEDIATE RELEASE

April 12, 2018

EXECUTIVE ORDER

– – – – – – –

TASK FORCE ON THE UNITED STATES POSTAL SYSTEM

By the authority vested in me as President by the Constitution and the laws of the United States of America, I hereby order the following:

Section 1.  Policy.  (a)  The United States Postal Service (USPS) accounts for almost half of global mail volume and is regularly cited as the Federal agency with the highest public approval rating.  However, a number of factors, including the steep decline in First-Class Mail volume, coupled with legal mandates that compel the USPS to incur substantial and inflexible costs, have resulted in a structural deficit where revenues are no longer sufficient to fund the pension liabilities and retiree health obligations owed to current employees.  The USPS is on an unsustainable financial path and must be restructured to prevent a taxpayer-funded bailout.  This finding is supported by the following considerations, among others:

(i)    the USPS has incurred $65 billion of cumulative losses since the 2007-2009 recession;

(ii)   the USPS has been unable to make payments required by law for its retiree health benefit obligations, which totaled more than $38 billion at the end of fiscal year 2017; and

(iii)  the Government Accountability Office has had the USPS on its high-risk list since 2009 because of a serious financial situation that puts the USPS mission of providing prompt, reliable, and efficient universal mail services at risk.

(b)  It shall be the policy of my Administration that the United States postal system operate under a sustainable business model to provide necessary mail services to citizens and businesses, and to compete fairly in commercial markets.

Sec. 2.  Establishment.  (a)  There is hereby established a Task Force on the United States Postal Service (Task Force), to be chaired by the Secretary of the Treasury, as Secretary and as Chairman of the Federal Financing Bank, or his designee, to evaluate the operations and finances of the USPS.  In addition to the Chair of the Task Force (Chair), the Task Force shall be composed of the following department and agency heads, or their designees:

(i)    the Director of the Office of Management and Budget;

(ii)   the Director of the Office of Personnel Management; and

(iii)  any other department and agency head the Chair may designate.

(b)  The Task Force shall consult with the Postmaster General and the Chairman of the Postal Regulatory Commission.

(c)  The Task Force shall also engage:

(i)    the Attorney General, on issues relating to government monopolies operating in the commercial marketplace;

(ii)   the Secretary of Labor, on issues related to workers compensation programs; and

(iii)  State, local, and tribal officials as determined by the Chair of the Task Force with input from the Task Force members.

(d)  The Task Force shall meet as required by the Chair and, unless extended by the Chair, shall be dissolved once it has accomplished the objectives set forth in sections 3 and 4, as determined by the Chair, and completed the report described in section 5 of this order.

Sec. 3.  Evaluation.  The Task Force shall conduct a thorough evaluation of the operations and finances of the USPS, including:

(i)    the expansion and pricing of the package delivery market and the USPS’s role in competitive markets;

(ii)   the decline in mail volume and its implications for USPS self-financing and the USPS monopoly over letter delivery and mailboxes;

(iii)  the definition of the “universal service obligation” in light of changes in technology, e‑commerce, marketing practices, and customer needs;

(iv)   the USPS role in the U.S. economy and in rural areas, communities, and small towns; and

(v)    the state of the USPS business model, workforce, operations, costs, and pricing.

Sec. 4.  Recommendations for Reform.  The Task Force shall develop recommendations for administrative and legislative reforms to the United States postal system.

(a)  Such recommendations shall promote our Nation’s commerce and communication without shifting additional costs to taxpayers.  The recommendations shall be developed in a manner that is consistent with the proposed plan to reorganize the executive branch as required by Executive Order 13781 of March 13, 2017.

(b)  Such recommendations shall also consider the views of the USPS workforce; commercial, non-profit, and residential users of the USPS services; and competitors in the marketplace.

Sec. 5.  Report.  The Task Force, acting through the Chair and the Director of the Office of Management and Budget, shall submit a report to the President, in coordination with the Directors of the Domestic Policy and National Economic Councils, not later than 120 days after the date of this order.  In its report, the Task Force shall summarize its findings and recommendations under sections 3 and 4 of this order.

Sec. 6.  Administration.  The Federal Financing Bank shall provide administrative support and funding for the Task Force.

Sec. 7.  General Provisions.  (a)  Nothing in this order shall be construed to impair or otherwise affect:

(i)   the authority granted by law to an executive department or agency, or the head thereof; or

(ii)  the functions of the Director of the Office of Management and Budget relating to budgetary, administrative, or legislative proposals.

(b)  This order shall be implemented consistent with applicable law and subject to the availability of appropriations.

(c)  This order is not intended to, and does not, create any right or benefit, substantive or procedural, enforceable at law or in equity by any party against the United States, its departments, agencies, or entities, its officers, employees, or agents, or any other person.

DONALD J. TRUMP

THE WHITE HOUSE,

April 12, 2018.

###