WASHINGTON — U.S. Postal Service officials are bracing for sweeping changes with the arrival of a new boss who is deeply aligned with President Donald Trump at a time the agency grappling with a financial crisis and battling for its future.
The selection of Louis DeJoy — a North Carolina businessman and top Republican fundraiser — as postmaster general puts a White House ally at the helm of an agency Trump has long agitated to change, deriding it as a “loser” and “delivery boy” for private shipping companies, particularly Amazon.
The administration, led by Treasury Secretary Steven Mnuchin, has angled for the authority to name a successor to current Postmaster General Megan Brennan and set package prices, among other terms, in exchange for emergency funding for the Postal Service, which leaders say could run out of money by October.
Trump in April called USPS “a joke” and said he would not authorize a $10 billion loan included in a pandemic relief package unless it raised package rates 400 percent on third-party shippers.
With DeJoy’s appointment and the resignation of David Williams, vice chairman of the board of governors and a foil to Mnuchin’s borrowing terms, some postal advocates worry that the changes Trump wants will not only materialize, they will be made without any benefit of additional funding — or the promised loan — for an agency whose already shaky financial footing has grown weaker during the coronavirus pandemic. They also worry it will politicize the independent agency, leaving USPS wounded in the run up to a presidential election that in many states may be conducted through the mail.
“We’re trying to manage through a pandemic and economic collapse,” Rep. Gerald Connolly, D-Va., who chairs the House subcommittee responsible for postal oversight, said in a phone interview. “What could go wrong in hiring a political donor?”
The White House declined to comment, and DeJoy did not immediately respond to a request for comment.
DeJoy is the owner of a real estate and consulting firm in North Carolina who had served as chairman and chief executive of New Breed Logistics, according to his family’s foundation page. New Breed was sold to XPO Logistics and DeJoy served on the company’s board of directors.
He is a longtime donor to Republican causes, according to Federal Election Commission records, and has given more than $157,000 to GOP candidates, committees and super-PACs since the start of the year. In March 2017, DeJoy hosted a fundraiser for Trump at his home in Greensboro, North Carolina. Tickets cost as much as $15,000 per couple, according to the Raleigh News & Observer. In the invitation he wrote of “unreasonable challenges” Trump faced from “the political establishment, the left wing groups, the media and many of the federal employees of the agencies of the executive branch.”
His wife, Aldona Wos, a former ambassador to Estonia and Trump’s nominee as ambassador to Canada, is the vice chair of the president’s Commission on White House Fellowships. USPS Board of Governors Chairman Robert Duncan, the former head of the RNC, chairs the fellowship panel.
Conservatives are cheering DeJoy’s appointment and hailing his private-sector experience in the logistics industry. Only four postmasters general have come from the private sector, and some analysts want the Postal Service to invest more heavily in the logistics arena, rather than door-to-door delivery.
“We have so many different ways to move stuff,” said Kevin Kosar, vice president of research partnerships at libertarian think tank R Street. “Where does the Postal Service fit into that picture? Hopefully someone from the outside like DeJoy can bring people into the main office who can help him think about that.”
Meanwhile, the Package Coalition — an industry group of online retailers led by Amazon, eBay, QVC and CVS Health, all companies set to lose substantially with higher shipping rates — launched a $2 million ad blitz Wednesday on Fox News. The 30-second commercial, which will air during broadcasts of “Hannity,” “Fox & Friends” and other network shows, takes aim at Trump’s proposal to quadruple package rates, calling it a “400-percent package tax.” It asks viewers to call Congress and urge members to support a postal bailout.
(Amazon founder and chief executive Jeff Bezos owns The Washington Post.)
“We’re trying not to be alarmist about it,” former Army secretary and Package Coalition chairman John McHugh said in a phone interview. “But we want to tell people that there’s something afoot that I think could be cataclysmic in the lives of many Americans. That is the Postal Service running out of money.”
The Postal Regulatory Commission, the body that approves postage rates and monitors the USPS’s budget, on Thursday reported the agency was in “dire” financial shape after 2019. It posted an $8.8 billion loss caused by declining mail volume and missed its payments into a prepaid retiree health benefit account. Those losses don’t reflect the nearly two-month long coronavirus pandemic, during which postal leaders told lawmakers they expected $2 billion losses each month as the economy shut down.
But Senate Republicans say they have data that indicates USPS’s losses, propped up by surging package volumes, are far more tame than the agency portrays and that the USPS is not in desperate need of a bailout as some officials claim.