Ross Gianfortune
This is GovExec Daily, where we bring you the federal stories that really matter.  It's March 25, 2021 . I’m Ross Gianfortune.

Late in the summer of 2020, the United States Postal Service came under scrutiny as mail-in balloting and the pandemic were hitting a crescendo and the effects were hitting the Postal Service. Anecdotal evidence of delayed packages were everywhere, often with the blame landing on Postmaster General Louis DeJoy, who had just taken office in June. The story, often with DeJoy at the center of it, was that the Postal Service’s delivery times were bad and getting worse. And everyone was feeling it.

Numbers tell that story, too. In a summer snapshot released in an October report, the USPS Inspector General’s office cited July statistics indicating that delayed mail increased 143 percent, due to the operational changes brought over the last year. In that October IG report, the inspector general identified 57 different initiatives USPS deployed in fiscal 2020 as part of an effort to slash 64 million work hours. 

Since he took the job, DeJoy has been accused of trying to destroy USPS with his operational changes. As a counter, he’s consistently claimed that he is simply trying to make the service solvent financially and that he was brought in to shape up the Postal Service. In February, DeJoy explained his idea of the role of USPS during a hearing on Capitol Hill.

Louis Dejoy
Too many Americans were left waiting weeks for important deliveries of mail and packages. I am proud of the dedication of our employees, who worked tirelessly to meet our public service mission during the most trying of circumstances.

Ross Gianfortune
During those February hearings, DeJoy noted that the USPS 10-year strategic plan would come out soon and it would answer many of the questions that members of Congress had for him. This week, it was released and it has more of the operational changes USPS has implemented in recent years, from slower mail delivery to prince increases to a modernization effort in the system. It is unlikely to satisfy DeJoy’s most-fervent critics, both in Congress and in the general public, who met the plan with skepticism and calls for President Joe Biden to make Postal Board moves that would allow for DeJoy’s ouster.

GovExec reporter Eric Katz spoke to DeJoy on Tuesday and he’ll join the podcast after a short break to talk about the strategic plan and DejJoy’s future. 

 
Ross Gianfortune
One year into the global pandemic, the way we work has been completely transformed. Looking ahead, which of these changes will remain permanent and which will fade with time? During the Future of Work virtual summit, Nextgov and Government Executive will dive into not only what the future of work looks like for government, but also how agencies can harness technology, people, and culture to build a workforce resilient to whatever challenges come its way. Learn more at govexec.com/events

Ross Gianfortune
This week, the United States Postal Service released its long-awaited 10-year business plan. In it, the Postmaster General Louis DeJoy and Board of Governors Chair Ron Bloom write that the “new operating model will dramatically improve service through strategies aligned to the changing needs of our customers.” But, considering the ways the Postal Service has performed after previous operational changes during the past year, critics of DeJoy remain unconvinced.

Eric Katz covers the postal service for us here at GovExec and he spoke to DeJoy earlier this week. He joins the show now to talk about the plan and the future of the embattled Postmaster General. Welcome to the program.

Eric Katz
It's good to be back.

Ross Gianfortune 
So what are the main points of this 10 year plan?

Eric Katz  
So I think, as we touched on in the story a lot of it had been previewed by the Postmaster General and postal management. You know one of the touchier aspects of this is slowing down, delivery windows so that some small ball, a certain chunk of of mail will be delivered in instead of, you know, maybe three days it would be five days to go, you know, across the country. There's parts of this you know where they talk about how they're going to raise their rates, so that they can generate more revenue. There's parts of this that are asking for legislative reforms from Congress that a lot of that has to deal with a long standing issue of how they fund benefits for retirees, especially their their health care. And, you know, then there's other parts of this that are gonna raise some concerns, there's a proposal to bring back a 2015 plan to shudder.

A bunch of postal plants around the country, not, not as they might be picturing a huge sum of these huge plants that around the country where they sort mail. Close and consolidate some of those. That was, that was a big issue back in the early 2010s, and is resurfacing now. There's other, there's other cost cutting measures like cutting off hours at certain underutilized post offices, and then there's ways that they think they can generate revenue by making it easier for businesses to send their products out to customers. And, you know, certain if those are happening locally they're planning to expand their networks that can be same day or next day, and for sort of large volume shippers that are going farther maybe two days. So there are ways where they're actually trying to speed things up and increase the percentage of their business that comes from packages that that's sort of one of the trend lines here that, that in this, this throughout this plan is mail is going to continue going down packages are going to continue going up, how do we leverage our network to maximize the business that we're getting as a result of that.

So, and then there's you know there's some other ways that they're trying to modernize they're getting new equipment and new vehicles and other investments to try to bring themselves up to speed with some of the ways that they weren't spending money in, in the last decade or so because they were so crunched financially. And then the last big point about this, that, you know some of our listeners and readers are particularly interested in is, is the workforce apart. I can get into maybe in more detail what some of that is, but generally they're looking at trying to make better pathways for people to have longer careers with Postal Service, especially, there's a big chunk of USPS workers that are considered non career, they don't get the same suite of benefits, as a career employee and trying to find ways for those workers to become career workers, so that they stay longer and are eligible for better pay and benefits. So there's there's a lot to this plan, it's, it's really comprehensive in its outlook.

They, the management's that they try to take a holistic approach. I think they did there's some things that aren't in this plan that are pretty noteworthy, but it's gonna it's gonna ruffle some feathers, but it didn't get universally panned by any means.

Ross Gianfortune
Let's get into what you just kind of referenced, what are the implications for the workforce, what are the goals for the workforce in the plan?

Eric Katz 
Right. So, one thing I was looking for as I read through this is any sort of goal or target in terms of the the numbers. The number of employees there USPS is shed something like 200 250,000 employees, since its peak 20 or so years ago.
 
And, you know, to what extent are they trying to continue that. There's a reorganization happening with with how its, its business structures are sort of aligned I apologize for sounding really jargony but if it is, it is sort of how they, how they put it, you know, they're, they're trying to make their ways that they do business make more sense with how the organization is structured. And as part of that, they're, they're finding, you know, something like 60,000 employees that they're trying to incentivize to leave to early retirement become redundant or, or at least in their estimation have become redundant.

So these are sort of the attrition measures that they've been using consistently over the last decade or so. So anyway I asked LouisDeJoy when I talked to him as you mentioned about that these targets and he said we don't have any we're gonna see where the business goes, you know, packaged business is more labor intensive than male business so you need more people to do that more work hours. So it's possible he said that they would grow by 100,000 employees over the next decade. I don't suspect that that's likely to happen I think that they're going to continue to try to find ways to find efficiencies. They talked about in the plan, ways to reduce work hours, ways to automate processes that are already underway that, you know, they would have machines instead of people doing those tasks. And that's all going to lead to fewer employees. Over time, there is you know there, one, as I mentioned some things that weren't in here, previous leadership at the post service has said we need to cut benefits to stay viable.vYou basically postal employees receive the same suite of benefits that all federal employees receive, which includes a pension and 401k and health care through retirement. That is untouched in this plan, there's no, there's no effort to undermine that.

So, so that's a that's a win for the labor groups that their employees and the unions that represent them. And, you know, there's, there's talk about, like I mentioned retention efforts and training efforts and investing in the workforce. So I think we might see a contraction over time but, but, you know, trying to make sure that the people they really need are incentivized to stay for for a long, longer periods of time. Those people in the workforce those the ones, sorting, delivering all those parts of the mail. So what does the plan mean for the regular postal cuff customer, if it is, you know, in the medium term and in the long term and even in the short term.
 
So, I think, for the average customer. The notice what you would notice would be somewhat subtle, if you're sending things locally, or, or even somewhat nearby it's, it's probably going to be the same in terms of the delivery windows. If you're sending something from the East Coast to the West Coast USPS had set the goal of delivering that within three days. Now they're saying it could take four or five.

So that, you know, that could be annoying for some customers if they have urgent things that they need to get across the country, however, that was often taking four or five days anyway because USPS for years and especially lately as we've talked about in recent months is not meeting its deadlines anyway. So that's sort of how one of the ways that the joy and others sort of explain this and try to take lessen the blow is saying, well, we're not meeting our deadlines our standards anyway so this is just a reflection of what's already happening.

You're gonna see, probably the price of a stamp go up. You know, it's, it's gone up to 55 cents. And we're gonna see a lot, you know, maybe instead of going up one step at a time, we'll go up three or four cents at a time. Which, you know, it probably won't make a huge difference to your average person sending a letter to their grandma but for people that are bulk users of the mail that will that will certainly cause a strain.

The other stuff, you know, it's all sort of back of house things, they're changing the way that they run their trucks and that they're going to be using less airplanes to send things around, and as part of why they're slowing down the windows, and they're they're trying, they're replacing mail sorting machines with packaged sorting machines. You know, these are all things that will affect the workflow, but not necessarily the customer on the ground you, you might see it, you know, and that last mile delivery. If it's taking slower or cost more but you won't. That part of things will be operational and in nature. You talked to join this week about this plan.

Ross Gianfortune
How has he been defending it?  And, you know we'll get to his future in a minute, but did he address that at all? The calls for his head, essentially?

Eric Katz
Yeah, it's interesting. I'll take the first part of that with the plan. He said, he calls it a bold plan, you know, transformative I think might have been a word that was thrown around an overhaul.

But then he also says these aren't these are common sense things. Nothing dramatic is happening here and that was the quality that he told me, and that these are all obvious. So it's he's a little bit I think maybe trying to have it both ways, they're trying to say. I have a bold vision but also don't worry something too big. In some ways the plan does reflect that you know it's it's something that is going to change the way USPS does business but like I just sort of laid out to a lot of customers, the won't necessarily notice those things. So that's that. And and they took a little bit of.

I also spoke to Ron Bloom who's chairman of the board and he said, Hey, look at what people are saying about this meaning you know the labor unions, for example, they're not totally bashing it like they usually do when things come out from postal management, they, they are sort of saying, there's some things we like about this, there's a couple things we don't like.
 
Maybe we will work on that, but they didn't say we need to throw this into the garbage. And I think this person management takes that as a way to joy You know we didn't get into really his, his future in terms of the pressure he's been facing to potentially resign or face a firing from the, from the board but, you know, he's certainly talking like he plans to be there, he plans to carry out this plan and implement it. And he said, he said to me, you know, this is my organization now, like, for example, like in trying to explain that some of the things he did in the beginning, he didn't have a full grasp of what was going on, and it led to some really bad outcomes.

But he's more confident now that these changes will take effect and will have the impact that he is imagining that they will and because then he's saying it's because I I control things now and I can, I can put this into place. And he certainly seems to in all the defensive, even when he's on the hill, he's, he can be a. He has a very straightforward way of dealing with stuff and part of that is, I'm the Postmaster General, you're not you know we want you to work with us, but I still call the shots I've always found that interesting about him, though it certainly makes a lot of his critics I think a little upset.

Ross Gianfortune
So, you know you noted, a little bit about his future and I, I certainly asked about it so the question is, you had a story last week about lawmakers, calling on Biden to get rid of the entire postal board not just fill the vacancies.

Eric Katz
I don't imagine that's in the offing, but what would that mean for the joy, what do all these calls for his head mean, And how do you see it different, as what Biden has done which is just fill the open slots. Yeah. Biden has not shown any, necessarily, necessarily has shown any inclination toward pursuing that path. During the campaign, he said, I just want to fill the vacancies, and since then, he said, you know that doing so will help bring more leadership, better leadership, into the management of the of the board.

That's, that would be a huge fight there could potentially be be lawsuits involved if you know if he has the best proper and how he could justify getting rid of the board members, so it's something that I think he doesn't want to pursue he'd rather just sort of try to influence it at the margins and steer the post service into a direction that is acceptable to to him and to the administration, rather than really trying to have a heavy handed approach in in dictating the way that it operates.

So, but the pressures not gonna let up. I mean, I talked about how some of the unions reacted lukewarm to the plan, and getting get entirely bashed Well, you know, in, in the halls of Congress Democrats were not happy with this plan at all. Some of the in the House side, especially the lawmakers that have direct oversight on committees of the post service, said that this plan was terrible and you know they have grave concerns about it, and you know the he's taking the joys taking the post service in the wrong direction. And it's got harmed customers and, you know, the elderly who did get their medicine, shipped to them. And the list goes on and on. Senate side Harry Peters who's chair of the relevant committee said something not quite as harsh but pretty similar in tone. So, you know, he didn't.

We talked about the board. Then I do have nine Senate confirmed members, but people often say that really the poster board is 435, members of the House and 100 members of the Senate because they're all voting on how the postal service operates. Indirectly, and sometimes directly. So, they're like, so the joys, you know, he talked about how he needs all of this plan to go forward in order for any of it to work. And a big chunk of that is getting legislative relief from Congress. Now, if could Congress hold that up as Democrats control both, both houses, because they don't like the direction to Joy's taking this in and say hey, we're not going to help you out unless you change course here, definitely possible.

It's something that we'll have to keep an eye on because, like, you know they like DeJoy said it, this is all or nothing. And they're trying to break even within 10 years, otherwise they'll lose $160 billion by 2030, according to their projections. And this, they say is the way that they avoid that. And just to reiterate, they need Congress itself. So the fact that you, that they're angering Congress at least some members, you know, may not portend well to the way this all plays out.

Ross Gianfortune
Yeah, I think that that sort of speaks a little bit to to what I was saying earlier about his, his, I guess delivery style, no pun intended. Is that it, it does no favors and trying to work with a Democratic Congress that I think already probably is looking for his head. Having watched some the February hearings. The last few days in preparation for this recording that was something that really struck me is how that may, it's not a great way to gain favor. He definitely has a brash approach.

Eric Katz
And he and I asked him about that, to some extent and I asked him why, you know, there was management's been teasing sort of a big plan that would, that would save the agency for years now well before the Joy got into office and they never put it out, and the thinking was why I lay this all out there because every faction every stakeholders is going to find something that they're mad about in the plan because you're not going to make everyone happy in this sort of overhaul, and I, and when I asked to join so why did you decide to do this knowing that you're going to find a lot of flames with it. He's basically said this, my job, I'm leading this organization, and I can't hide how, you know what the challenges we face and how to get the agency back on course.

And he said that, you know that that type of thinking of being, you know, afraid of what of angering people is what sort of froze the postal service prior to his arrival where they were unable to take what He deems to be necessary steps, obviously there's disagreement on, on what those steps should look like. And this is just one vision. But, you know, there. The fact that he put this out there, you know, probably will do more to get the conversation going, than we've seen in recent years because there's always talk about reforming the Postal Service and never really any action. So, you know, maybe, maybe this will will start some momentum. I think I was probably part of the point. And so we'll have to see what happens over the next few months, I guess, sort of talking about the conversation is, 

Ross Gianfortune:
We'll end on this: I'll ask you to put your, your analyst hat on. Because when we posted your story. And when we post, generally, any stories about the Postal Service, we get a torrent of comments that emphasize the word service, I'll read one right now the Postal Service is mandated in the Constitution. It doesn't have to make money, it's not a business, it's like the military no one expects the US Navy to turn a profit. And that is certainly one side of the argument, and one that is not without value for sure I'm not going to dump all of our readers.

On the other side you have, the more we got to get this thing back financially solid we got to get things back in the black digital very much represents that certainly in his, his public statements, oftentimes, somewhere in the middle I think is a lot of industry you know we've had post comms. Mike Plunkett on the show you've talked to him as well and you've talked to industry people where it's somewhere in the middle where it's like, the post office has a lot of business elements to it and that is a main part of it and obviously the statutes are such that they requires it to be funded by the postage and retail products on stuff. But the question ultimately becomes that financially is not really super useful as the DeJoy constantly tells us that it keeps losing money. But secondarily, so much of this is governed by actual law. So how does this all square up and how does this kind of clash the Titans, Go going forward.

Eric Katz
Yeah, that's probably the million dollar question. I think what the post service is doing here is trying to, to lay out what it would what it has to look like, or at least in their view what it has to look like for these those dueling priorities that Congress has has spelled out to coexist. The post service should operate like a business and and breakeven is is one part of it, and the post service should be a public service that delivers mail to every address in the country is another part of it, those, you know, I think we've talked about this on the podcast before those two things are in conflict with each other businesses don't make decisions at the post service has to make because they're a public service. So what we're seeing here is, is, you know, not, not necessarily trying to turn a profit. You know I appreciate what the reader is saying there, and maybe quibbling but there's difference between trying to be profitable and trying to break even, not, not lose money. So, anyway, we got off track there but what I was saying what I'm trying to say is that what the joy is saying and what post management is saying is, in order to break even.

There are certain steps that we have to take. But we're not going to make decisions that jeopardize our obligations in terms of serving, and serving the public. You know he's committed to delivering mail six days a week and in some cases seven with packages. He's committed to making to growing package business and making it so that businesses can utilize postal service more easily and more quickly to get their serve their get their, their goods out, and that you know, prices aren't going to be skyrocketing up to $2 Send a letter, you know, we're going to see some increases but it'll be gradual over time. And, and so, in order to do both of those things that there's other parts of it that you might need to deal with, like, a slightly slower mail which is going far away. And, you know, maybe, maybe contractions in the workforce, you know that are related to facility closures and just as efficient quote unquote efficient efficiencies over time, and cutting post office hours and things along those lines.

These are all, all things that, You know, could you could foresee happening. There's been more extreme proposals put forward for the Postal Service in the past. If you want to, you know, frame it that way you know they didn't talk necessarily a lot about reducing to the door delivery, which is something that's been, you know, obviously, a lot most cities around the country you get your mail to your door, which is expensive because it takes more time as opposed to putting a cluster box in the corner somewhere and everyone around the block has to go to that corner to get their mail, that's been proposed, that's not a big part of this plan that I've seen at all.

So there are certain things that that post that advocates for public posts to serve as a public good, to take away from this. And, and be satisfied with that there is sort of a growth strategy. It's not all cuts, you know, well, well. Certain factions find things to be upset about. Oh absolutely, absolutely, there's, there's certain things that, that, that are, you know, cuts, so that they're trying to strike a balance here, And, and we'll have to see if, if the stakeholders that are involved in decision makers that are involved, including members of Congress are going to accept that if they have their own vision that they're going to try to tweak this, if the by administration is going to put a stamp on it, on a scale and in some ways.

These are all questions that remains to be seen but, you know, the conversation is now is not moving forward. I think what you said earlier always sort of sticks in my head, which is that the, there is such a conflict between the business model, and the service model. And Congress has a role in that. Yeah. And I should add that when, when I say that these are the decisions that went to Joy says, this is the way it has to be, there's always the caveat of this is the way it has to be if you want us to be self funded. If you want us to be a federal agency like, you know, like the reader mentioned the Defense Department, or, or, you know, the Veterans Affairs Department, where they get appropriations every year to cover their services, then there's a lot of things they can do, and that that's something that hasn't been done for the Postal Service. In recent decades. Aside from $10 billion that they received as part of COVID relief.

Ross Gianfortune
But, you know, that's always a lot of listeners to this show, whoo listen daily, and I'm sure there are more than I would like to contemplate because I probably have to be more thoughtful in the way I talk, but nonetheless, they would probably know, and find the the theme, to me, which is that Congress doesn't do enough general in Congress doesn't have a strong enough oversight component to it and Congress sits on its hands a lot and there's a lot of standing around in Congress and yelling and that most people in Congress.

You've covered hearings, they more want to get on TV than they do actually get anything done, there's certainly been incidents during even the Detroit hearings where it's more about point scoring than it is about actually getting the information or answers into Joy's not cooperative in that way, either by, by any means, but Congress has avenues to make the Postal Service more like, you know the agencies you mentioned, And they're not using. And so, this. That's the thing that that that I'm continuing to come back to on this because I think the the lay people, our readers who complain once that the Navy isn't doesn't have to return a profit it's like well yeah but that's not that's not the post offices fault because they're not an agency, and Congress Congress's role in this I think is often overlooked because people just don't understand the way the post office works but we've gone on forever. So Eric, I will let you go now and I will thank you for being on the show with us and thanks so much for your reporting.

Eric Katz 
Yeah, absolutely.

Ross Gianfortune
Thanks for listening to GovExec Daily. Our show was produced by Adam Butler and hosted by me, Ross Gianfortune. We want to thank National Academy of Public Administration’s Janet Hale and Terry Gerton for joining the program. Our music is the song “Signals” by Catfish Dancing. Be sure to rate, review and subscribe on Spotify or Apple Podcasts or wherever you get your podcasts. You can email us any feedback at podcast @ govexec.com or hit us on Twitter @ Govexec.  
 
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