Trump Said Amazon Was Scamming the Post Office. His Administration Disagrees.
Posted December 4, 2018 10:26 p.m. EST
WASHINGTON — President Donald Trump spent much of last spring accusing Amazon of pulling a “scam” on the American taxpayer and ripping off the U.S. Postal Service. On Tuesday, his administration delivered its own verdict: not so much.
The task force created by Trump to investigate the Postal Service’s finances did conclude that the mail system is losing money. But a report issued Tuesday said that commercial package delivery for Amazon and other e-commerce retailers was actually profitable for the Postal Service and was not costing the United States “massive amounts of money,” as Trump has suggested in his tweets.
Commercial package delivery is not profitable enough to offset the revenue losses the Postal Service is suffering, however, as Americans mail fewer and fewer first-class letters, and the Treasury Department task force outlined several recommendations to help shore up its finances.
None of the suggestions explicitly recommend the type of price increases that Trump floated last spring, when he posted a tweet accusing Amazon of using the Postal Service “as their Delivery Boy.” And last December he tweeted that Amazon was getting “richer” while making the postal system “dumber.”
“Should be charging MUCH MORE!” he wrote.
But the report did include some recommendations that made online retailers uneasy. One would push the Postal Service to price package delivery to maximize profits, instead of maximizing delivery volume. Another would force the service to create separate accounting books for letters and for packages, which retailers fear could lead to an increase in package rates.
Its top recommendations were to improve postal system governing to create a more stringent definition of which deliveries and which customers the Postal Service must include under its legal — but vaguely defined — “universal service obligation.”
It also called for steps to reduce the service’s labor costs, including eliminating collective bargaining over pay for postal employees. And it recommended lifting caps on how much the service can charge for letter delivery and giving it power to reduce the number of days it delivers mail — which most likely would mean ending letter delivery on Saturdays.
The task force also proposed creating a complicated new system of pricing for packages, in which it could cost less to send a box of prescription drugs than to send a board game. It would also allow the postal system to charge other delivery services for access to Americans’ mailboxes; under current law, the Postal Service holds a monopoly on what can actually be delivered to a mailbox.
Amazon and many other retailers formed an advocacy group on postal issues this year, called the Package Coalition. Its chairman, former Army Secretary John M. McHugh, said Tuesday that the coalition was “concerned that some of the task force recommendations, including the recommendation to create a separate package business, would needlessly reduce efficiency and force the Postal Service to raise prices on American businesses and consumers.”
The report was nonbinding. Many of its recommendations will fall into the storm drain of a divided Congress, with Democrats set to take control of the House in January. It was unclear why the administration chose to release the report Tuesday, when the news cycle was dominated by trade tensions with China and funeral proceedings in Washington for former President George Bush.
Administration officials played down the report’s links to Trump’s frequent Twitter complaints about Amazon. “None of our findings relate to any one customer of the Postal Service,” a senior administration official said Tuesday afternoon, in a briefing call with reporters. “We based our analysis on the needs of all our economy.”
Instead, they cast the report as a needed set of reforms for a service that has been losing money for a decade, and is projected to lose tens of billions over the next decade.
“We believe these are the first steps forward,” Steven Mnuchin, the Treasury secretary, wrote to Trump at the beginning of the report, “in creating a sustainable business model under which the USPS can continue to provide necessary mail services for all Americans.”