Into Delivering an Election
Trymaine Lee: When I was kid growin' up South Jersey, this thing called mail, it was actually pretty cool. I had pen pals. And there was nothin' like getting a letter in the mail with your name on it. I remember in my house getting stamps was a big deal, Ida B. Wells, Malcolm X, Jesse Owens.
Back then a lot of kids probably felt this way because the United States Postal Service reaches everyone, deep in the city centers and way out to remote rural areas, helping people pay their bills, keep up to date on medication, and stay connected. It employs more than 650,000 people. And the truth is, most Americans support it.
But for years, the post office has been in financial decline. It's lost $69 billion since 2011. Things have gotten worse during the coronavirus outbreak. Postmaster General Megan Brennan estimates that without government assistance the office could run out of cash by the end of September.
Megan Brennan: The stark reality is that the pandemic will cause meaningful near-term and long-term implications that endanger our ability to fulfill our universal service mission absent Congressional intervention.
Lee: I'm Trymaine Lee. And this is Into America. Today we're digging into the struggles facing the U.S. Postal Service as the institution that's promised to deliver our mail in snow, rain, heat, and gloom of night, is now up against a pandemic, and in six months an election.
Archival Recording: Listen, if we go to vote by mail, the responsibility of the postal service is enormous.
Archival Recording: They actually have a right under our state constitution to vote by mail.
Donald Trump: I think that mail-in voting is a terrible thing.
Lee: Amidst the political drama and a funding fight, will the USPS be able to pull it off?
Archival Recording: Financially this pandemic has dramatically impacted the postal service, as it's impacted the airlines and a lot of others. They're getting support. The postal service isn't. That's a problem.
Lee: To understand the challenges facing the postal service, I turn to my colleague Stephanie Ruhle, anchor with MSNBC and the senior business correspondent for NBC News.
Stephanie Ruhle: The post office is an American institution that traditionally has tremendous bipartisan support. It's over 250 years old, okay. Ben Franklin used to run it. It's one of the largest civil employers in our country. And I wanna just break down so people understand who it employees: 18% of vets, 39% of people that work for the postal services are minorities, 40% are women.
It is an institution. And one of the things that makes it the institution is the, you know, we will be there in the snow, the rain, the gloom of night. The commitment, every single day, even with the internet, they're delivering 182 million first-class packages.
Lee: How is the post office set up to run?
Ruhle: It's almost like a business within the government. Unlike a lot of other government organizations, it is self-funded. They can't just tap and say, "I need money here," and get it.
Lee: The U.S. Postal Service is an independent agency that funds itself primarily through the sale of stamps and sending of packages.
Ruhle: The postal service is an institution. But it is not a highly optimized business. And I don't know that it's ever going to be. And you know what? That's okay. Not everything has to be highly optimized businesses.
Lee: When you think of the postal service, this steady historic institution, it always seems to find itself embroiled in controversy and political drama. Break it down for us. How is this institution the center of so much mess?
Ruhle: Okay. So they're in a bad situation. $160 billion of debt is what they have. Where the real money issue came for the postal service was in 2006. A law that changed some obligations, pension obligations. So the postal service owes an enormous amount of money in pensions to all of those people I just talked about: the vets, the minorities, the women who work for the postal service. So are they not as competitive as UPS or FedEx? They're not.
Lee: So you and I are old enough to remember buying stamps and the pen pals and writing letters. And it means something to us, right. But there's a new generation of folks who are getting their mail digitally. They're not necessarily sending and receiving mail. And those folks might argue, "You know what? They're hemorrhaging money. No one's getting snail mail anyway. Could UPS or FedEx just do the job of the postal service and optimize themselves as a business?"
Ruhle: Sure. Some people think that. But there's also 182 million pieces of mail that get delivered every single day. I just think we don't understand. We don't appreciate what an enormous country we have and all the demographics that exist here. And you can't just go digital.
Lee: You know, there are some people who criticize the postal service and say it's mismanaged. It's just wasting taxpayer money. Is it about the funding? Or is it about politics? Or is it some confluence of both?
Ruhle: So it's a confluence of both. And while they're not perfect, one of the things that's been the most valuable during COVID is getting our mail from a mail person who's putting themself (SIC) at risk every day.
Lee: And so getting into COVID, how is the spread of coronavirus impacting the USPS financially? Because there's reporting that they've seen a drop in mail volume. And volume is expected to go down to 50% in the second quarter of the year.
Ruhle: Well, it's hurt them financially. Listen, any business that has stayed open during this, it's been a big undertaking. But lots of businesses have been able to make a whole lot more money because they've got margins, right. The postal service doesn't change their pricing. They're committed to their set pricing schedule. And that doesn't change.
But you also have to think about all of those people who work for the postal service, that every single day are essential workers, who are putting themselves at risk. And we need the post office right now more than ever.
Lee: Have the Trump administration and Congress responded accordingly?
Ruhle: The USPS, what they would like, is $75 billion in cash, grants, and loans. And there are members of Congress on both sides of the aisle saying, "How do we solve for this?" Unfortunately they haven't done it yet. And the president has just, he's had this thing about the postal service since the beginning. And to me it's really strange. This one is odd.
Lee: Here's how the funding fight is playing out. A $13 billion grant was initially set aside for the USPS as part of Congress's $2 trillion coronavirus aid relief and economic security package. It was money that the postal service would not have to repay. But it was blocked by the Trump administration.
The White House did not respond to our request for comment. But the president has said he believes the postal service wastes money. And he's publicly tied financial relief for the USPS with package rates.
Trump: If they don't raise the price, I'm not signing anything. So they'll raise the price so that they become maybe even profitable, but so they lose much less money.
Ruhle: So the president has always sort of had a thing about the postal service. And part of this has to do with how he feels about Jeff Bezos and Amazon.
Trump: The postal service is a joke. Because they're handing out packages for Amazon and other internet companies. And every time they bring a package, they lose money on it.
Lee: The president has had a public feud with Bezos that goes back years. In addition to owning Amazon, Bezos also owns the Washington Post, which has been critical of Trump at times. Trump says the USPS is being ripped off by Amazon. So fix it or no funding.
Trump: The post office should raise the price of a package by approximately four times. Because they don't raise 'em. For some reason, these people have been in there a long time. But for some reason, they're very cozy with some of these companies.
Lee: Just hours after making those remarks from the Oval Office at the end of last month, the president tweeted, quote, "I will never let our post office fail." The cost to raise package rates aimed to hurt Amazon would likely hurt the USPS as well.
Ruhle: Well, here's the problem Trymaine. Even if we raised the price, that's not gonna solve it. There are other ways they could cut. We have lots of post offices that aren't used very much in certain towns. Maybe we could consolidate them. Maybe it wouldn't be door-to-door. There are solutions.
For us to say, "Well, we're gonna sit down and create a carve-out for the airline industry." We've got $600 billion of forgivable loans, that means grants, for small businesses. But you, the postal service, 'cause the president doesn't like the way you operate, best thing we're gonna do is give you a $10 billion loan. And then we're gonna revisit this."
Lee: The CARES package, signed into law at the end of March, ultimately did include some money for the U.S. Postal Service in the form of that $10 billion loan the Stephanie referenced. Now, of course, a loan means you need to repay it. And it also means that the administration gained some leverage over the postal service.
Getting the money is contingent upon whether the USPS and the Treasury Department can agree on conditions for the loan. The USPS told us that as of this week, they haven't received any funding. They're still working out the exact terms with treasury. So Stephanie, President Trump is putting a lot of pressure on the postal service. Are they complying? Are they responding to that pressure in any way?
Ruhle: They're not. They've made a commitment since they were created to have a very low priced same price to deliver packages and mail to any place in the United States, irrelevant of where you lie. And they're sticking to it. It's part of their initial creed, their motto, their mission.
Lee: So at the same time that the USPS is refusing to raise rates, President Trump has succeeded in making other changes to the postal service. Every member of the agency's bipartisan governing board is now a Trump appointee. And that board recently appointed a new Postmaster General, Louis DeJoy, a GOP donor from the state of North Carolina, who has private sector experience in the logistics industry. DeJoy assumes the role from Megan Brennan on June 15th.
Ruhle: Often times it's great to have someone from the private sector if they really understand what they're doing. But in this case, you know the president has a very targeted agenda. It has not gotten a lot of support from other Republicans. So what does he do? Bring in a donor. That's what's unsettling.
Lee: In the big picture, what's at stake here? The postal service, if they don't get the funding that they desperately need and aren't about to buoy themselves or buoyed by Congress, what's at stake?
Ruhle: I mean, what's at stake? Relief checks, prescriptions, packages, cards, letters, the way we get our bills. I mean, getting your mail every day is essential. My mom and dad don't use the internet. My mother doesn't have a cell phone. My mother gets her prescriptions in the mail. And at a time when we are self-isolating or quarantining, it couldn't be more important.
But the political angle that's also very worrisome is, think about how important our polling stations are. Think about election security, what a huge issue it is around the world. And we may be in a position where we're going vote-by-mail, right. What if there's a disruption? What if they lose funding? The role they could play is bigger than I think anyone's thinking of.
Lee: Next, we'll get an inside look at what the USPS could be facing in November. That's after the break.
Lee: Over the last two decades, the U.S. has seen a slow but steady increase in mail-in voting. And because of the pandemic, more than half the electorate could wind up making their pick for president through the mail this November. All 50 states and the District of Columbia already allow for mail-in voting in at least some cases.
There are five states, Colorado, Oregon, Washington, Hawaii, and Utah that send out ballots to all registered voters before an election. And in an effort to keep voters safe from coronavirus, several more states are taking steps to make it much easier for their residents to vote by mail this November. In Michigan, the Secretary of State's office is sending absentee ballot applications to all registered voters.
Archival Recording: We felt and I feel it's important now more than ever to give our voters the certainty, the clarity, in knowing exactly how to vote in this year's elections without leaving their home.
Lee: And earlier this month, California governor Gavin Newsom signed an executive order for counties to send out mail-in ballots ahead of the general election, giving all residents the option to vote by mail.
Gavin Newsom: We are reaching out to all registered eligible voters and giving them the choice not to feel like they have to go into a concentrated, dense environment.
Lee: But these efforts are being met with resistance. Over the weekend, the Republican National Committee and other Republican groups filed a lawsuit to stop California's expansion of mail-in voting saying that the move to could lead to fraud. Trump tweeted earlier this week that, quote, "This will be a rigged election."
The truth is documented voter fraud cases in the U.S. are almost nonexistent. In response, Twitter for the first time ever added a fact-checking label to the president's tweet and directed users to articles refuting claims of voter fraud.
Ruhle: The president has made it very clear that he doesn't want people to vote by mail, even though he himself votes by mail in the state of Florida.
Archival Recording: So you were highly critical of mail-in voting, mail-in ballots for voting.
Trump: I think mail-in voting is horrible.
Archival Recording: But you voted by mail--
Trump: They screw up.
Archival Recording: --in Florida's election last month, didn't you?
Trump: Sure, I could vote by mail for the--
Archival Recording: Then how do reconcile that?
Trump: Because I'm allowed to.
Lee: Donald Trump could be in some ways maybe motivated to reach rural voters who rely on the postal service. Well, so what gives?
Ruhle: I don't know. You do the math, Trymaine. What do you think there's more of? Rural voters that are gonna get his vote or African Americans and Latinos who may not have voted because they have hourly wage jobs. You tell me.
Lee: Answer B I think maybe.
Ruhle: Ding, ding, ding. (LAUGHTER)
Lee: As the country fights coronavirus, 70% of voters say they are in favor of allowing people to vote by mail if they want to. That's according to new polling from the Pugh Research Center. But it's a big ask for an agency that's facing an uncertain financial future. Is it ready?
John Nolan: The fact is, if mail comes to the postal service, if election mail comes to the postal service, they will deliver it. If states decide that they wanna vote by mail, the postal service will be ready.
Lee: John Nolan served as the Deputy Postmaster general from 2000 to 2005. For him, the mail's kind of a family business.
Nolan: My father was in the greeting card industry. So every time we raised rates, he was really mad at me. (LAUGH)
Nolan: And I used to tell him, "At least when we raise the price of stamps, we don't shrink the size of the stamp. You guys raise the price of greeting cards and shrink the size of the cards." (LAUGH) But the mail has always been important to us as a family.
Lee: John Nolan is used to dealing with crises. Before he became the Deputy Postmaster General, he was the postmaster in New York City where he oversaw the postal service during the anthrax attacks of 2001. Does what we're seeing happening now compare to anything you've seen in your long history with the postal service?
Nolan: No. It really doesn't. And the same is true of almost every business in the country. I mean, when 9/11 occurred it was an event. And immediately you could develop a plan because you knew what happened during the event, and you knew what you had to do get back home.
When anthrax hit, the postal service figured out fairly quickly exactly where it had occurred, how it had occurred, and was able to isolate it and communicate to the public what we're doin', why we're doing it. And we moved ahead. And so you know what happened and you know what's next. Here, well, you know what's happened. But you don't know how it happened exactly. And you don't know what's next.
Lee: What role does the postal service play in your average, normal election year?
Nolan: You may remember Publishers Clearing House.
Lee: Oh, yeah, (LAUGH) the big checks.
Nolan: They used to mail to almost everybody twice a year. But they treated each mailing as if it was the first time it was ever done. And that's the way the postal service treated it. So when it comes time for an election, what the postal service does, is they assign people to the election commission.
And they begin to work with them on mail piece design. They work with them on the accuracy of their mailing lists. 'Cause mailing lists get outdated. Then the postal service will work with the printer who's printing up all these ballots and make sure that postmaster throughout the state are aware of what's coming, when it's coming, what it looks like.
So you treat it every time like it's the first time. Because there's new people involved, there's little wrinkles that occur. And the election commissions that work closely with the postal service on doing that will have a successful election.
Lee: But this year could be really different. So if you approach it like it's the first time, it's like your first game, and it's the World Series. If we expand vote by mail, do you get the sense that the postal service as it stands right now is prepared?
Nolan: Well, it's not up to the postal service to decide whether there's gonna be vote by mail obviously. So the decision has to be made by the states. But what the postal service would do as states make a decision to vote by mail, that's when the ball starts rolling.
There's no magic to the postal service reinventing, "Okay, how are we gonna do this?" They already know how to do it. All they have to do then is assign people to start working with the election commission people in the states to set up a successful program. Now, this would be a massive undertaking to be sure. But it's not like it's their first rodeo.
Lee: You know, the one thing we keep hearing President Trump say is that if we allow voting by mail, then it'll be rife with corruption. People will be stealing ballots and stealing votes. Do you have trust that the postal service could keep the ballots safe?
Nolan: The postal service will definitely keep the ballots safe. The questions about fraud really are outside of the postal service supply chain, so to speak. But once things get to the postal service, that whole chain is very tightly controlled. So I have no concerns whatsoever about fraud occurring with mail in the mail system.
Lee: President Trump has also been demanding that the postal service make some changes like raising its prices before signing off on any emergency loans. What do you make of those demands?
Nolan: The notion has been that the postal service loses money on its package service. That's just not true. It's not true. By law, the postal service has to not only cover its direct costs for every product, but it also has to contribute to institutional costs.
Like that walk up to the front door of your house is not attributed to any one class of mail, it's spread over all classes of mail. So the postal service makes money, so to speak. It covers costs through its package delivery including where it offers discounts for very high volume mailers.
The fact is that if the postal service dramatically increased package costs, it would not generate more revenue. Because mailers would leave. UPS would get some of those packages. FedEx would get some of those packages. Amazon would deliver its own packages.
This is not a business where you can say, "Yeah, I'll raise my prices to whatever we want it to be. And I'll keep the business." It doesn't work that way. (LAUGH) You raise prices dramatically on packages, and you lose the package business, and the postal service would be in demonstrably more financial difficulty.
Lee: So does the financial shortfall change their ability to get folks out there and deliver ballots? Or they operate under this circumstance all the time anyway?
Nolan: Well, the problem with the finances would be if they completely ran out of money and couldn't pay people. And therefore you didn't (LAUGH) have employees out there. There's a risk of that. But it doesn't make sense in my opinion to wait till that kinda crisis occurs. There's an awful lot of people in this country that have their jobs dependent on the mail.
Lee: The future of the postal service depends a lot on legislation and dollars and cents. But an expert we spoke said that the upcoming election might be make or break for the postal service. Do you think that if the postal service, say, over-performs, really delivers, that that might kind of steady the ship here just by over-performing and showing folks that, like, you know, we can do this, we are equipped, and we are capable?
Nolan: To me, the postal service shows that every day. (LAUGH) They deliver every day.
Lee: Right. (LAUGH) Right.
Nolan: We'd love it if people would say, "Look, if the elections go fantastically well, that's a feather in their cap." But look at things that happen every day. Look at what happens in hurricanes in Florida and how mail gets delivered almost immediately. And during the problems in Louisiana, mail got forwarded to where people had to be.
If you're not impressed by the postal service now, and 94% of people in the country apparently are because they say it's the most trusted government agency, then waiting around for an election to see whether or not they can handle it is, I just don't think it's the right way to look at it.
Lee: Do you feel good about the future of the USPS?
Nolan: I'm hopeful that good, sound decisions will be made by leadership in this country and to make sure that people in rural America that wanna have a business will have a way of keeping their business alive. People in cities, low-income areas will also get the service that they need to live their lives. So I'm hopeful because I can't believe that leadership in this country would let a national resource like the postal service go without some support.
Lee: John, thank you so very much. In preparing for this interview and talkin' to you, I have all these memories of literally writing letters and writing postcards and buying the stamps. So thank you for your insight. Thank you for your time. We really appreciate it.
Nolan: Well, keep those cards and letters coming. It helps pay for my retirement. (LAUGHTER)
Lee: So former Deputy Postmaster General John Nolan thanks that if the USPS gets the funding it needs, it will be up for the challenge this fall.
Ruhle: Listen, I think that a crisis forces you to address slow decay.
Lee: Stephanie Ruhle told me that she hopes so too.
Ruhle: It gives you an opportunity to make things better. I mean, I think I'm probably a romantic in that belief. Because look at when natural disasters hit. They most often hit developing countries or they hit poorer states. And you always say, "Great. This is the opportunity where they're gonna have stronger infrastructure. And this won't happen again."
But it happens again and again. In this case, maybe this is an opportunity that you can take an institution, that you know what, doesn't have the best technology. It is somewhat outdated. And you can fine tune it. And if they get an injection of money, let's hope this could be an opportunity to do that. But I'm not overly optimistic because I just look at how history works.
Lee: Stephanie Ruhle is an anchor with MSNBC and senior business correspondent for NBC News. Into America is produced by Isabel Angel, Allison Bailey, Aaron Dalton, Max Jacobs, Barbara Raab, Claire Tighe, Aisha Turner, and Preeti Varathan. Original music by Hannis Brown. Our executive producer is Ellen Frankman. Steve Lickteig is executive producer of audio. I'm Trymaine Lee. We'll be back on Monday and again next Thursday.