The Postal Service may need a bailout. But it’s actually making tons of cash

The Postal Service may need a bailout. But it's actually making tons of cash

Lawmakers on Saturday are expected to vote on a bailout for the US Postal Service, which, on paper, has been posting huge losses for years. But in reality, the agency is generating billions in cash. The legislation is certain to stall in the GOP-held Senate. The White House said Trump would veto it. Stock’s strong sales continue in July Joe Biden and fellow Democrats spun an assortment of facts to their benefit in their national convention, omitting inconvenient truths such as Barack Obama’s record of aggressive deportations and swift action by a Republican president to save the auto industry more than a decade ago.

New York (CNN Business)The House of Representatives on Saturday approved legislation for a bailout for the US Postal Service, which, on paper, has been posting huge losses for years. But in reality, the agency is generating billions in cash.

Virtually all of the agency’s financial problems stem from a unique, arcane accounting system that no other business or government body follows and that doesn’t accurately reflect real costs. (“Utterly absurd,” as one lawmaker calls it.)

The financial problems have nothing to do with the expected surge in mail-in ballots for the election in November. And they are certainly not because of its contracts to handle delivery of Amazon (AMZN) packages, no matter what President Donald Trump claims about losses on those deliveries. Postal law, and investigations of those contracts, have confirmed that the USPS makes money on the contracts it has with Amazon and other major shippers.

    The USPS booked positive cash flow of nearly $2 billion in the nine months ending June 30, up from $1.3 billion in the same period a year ago. It had positive average annual cash flow of $3 billion over the previous three fiscal years.

    That positive cash flow came despite a large reported net losses — $7.5 billion the most recent nine months, up from a net loss of $5.9 billion in the year earlier period.

    It is true that there has been a continual decline in traditional first class letters over recent years, as bills and payments shift from traditional mail to online. But even with the drop in revenue and volumes from traditional letters, the USPS makes money on that business.

    The decline in letter volume has been more than made up by increased package shipments, as consumers make more purchases online.

    Cash positive doesn’t mean profitable

    Cash flow and profits are not the same thing. Profitability factors in the costs of doing business, and in the case of the Postal Service, those costs are significant.

    The biggest drag on its finances is a unique rule that requires the USPS to prepay for workers’ retirement benefits for decades into the future. In 2006, Congress passed a law to require the the agency to pre-fund 75 years worth of retiree health care benefits in the span of about 10 years.

    “There’s no other entity on Earth that does anything like that. When I talk about it, people say it’s utterly absurd,” said Rep. Peter DeFazio, the author of legislation that would remove that requirement. The legislation, which the USPS supports, has passed the House with bipartisan support, and a Senate version also has bipartisan sponsors, but no vote has been scheduled yet.

    The rule took effect in 2007, just before the start of the Great Recession, when the Postal Service was still reporting profits. But the economic downturn hit hard and made the payments unaffordable.

    It’s true that no other unit of government or private company that provides retiree health care coverage has to make such pre-funding payments. And in recent years, the USPS has not made the required payment, citing a lack of available cash.

    Taking charges for theoretical payments

    Here’s where it gets really absurd.

    Even though the USPS hasn’t been making those payments, it continues to book the theoretical cost as an expense — $16.8 billion since the start of the 2017 fiscal year. That accounts for most of the agency’s reported losses.

    Retirees are still covered because the USPS made payments in the past. As of September 30, 2019, the balance of the retiree health benefits fund was $92.2 billion, with interest on the holdings covering most of the actual premium costs it made.

    The cost of retiree health care coverage is further inflated by the fact that only 74% of the nearly 500,000 retirees and their family members covered by those policies are fully enrolled in Medicare. Instead they use the USPS health care policies as their primary insurance, rather an as supplemental insurance.

    Nearly all private sector and government employers that provide retiree health benefits require full participation in Medicare, said Megan Brennan, a former postmaster general, before a House committee last year.

    If the USPS would require full Medicare participation, it would eliminate about 90% of the USPS unfunded retiree health care costs — about $33.5 billion — over 10 years, she told lawmakers.

    In addition to retiree health care costs, workers’ compensation is another hypothetical cost weighing on USPS finances. Since October 2018, it has booked about $4 billion in costs above what it is actually having to pay to cover the cost of on-the-job injuries or deaths suffered by postal workers.

    Should USPS be trying to make a profit?

    Beyond the question of bookkeeping and accounting rules being responsible for most of the losses, there is the question of whether or not USPS should be making money.

    Most people don’t realize that the service typically runs without any taxpayer subsidies, despite being a part of the government that goes back to before the revolutionary war.

      “This is the Postal Service. It’s not the postal business,” said DeFazio. “It doesn’t need to make money.” He said if it wants to maximize profits it would hurt many Americans, particularly in rural areas that are expensive to serve.

      “UPS (UPS) and FedEx (FDX) depend on Postal Service to go where they don’t want to go,” he said. “If you wanted to run it as a business, you’d eliminate the least profitable routes, you’d cut out all of rural routes. There’s no substitute for the Postal Service for much of the country.”

      Source: www.cnn.com

      Author: Chris Isidore, CNN Business


      House approves bill to reverse Postal Service changes blamed for mail delays and send $25 billion to boost USPS ahead of election

      House approves bill to reverse Postal Service changes blamed for mail delays and send $25 billion to boost USPS ahead of election

      With heated debate over mail delays, the House approved legislation in a rare Saturday session that would reverse recent changes in U.S. Postal Service operations and send $25 billion to shore up the agency ahead of the November election.

      Speaker Nancy Pelosi recalled lawmakers to Washington over objections from Republicans dismissing the action as a stunt. President Donald Trump urged a no vote, including in a Saturday tweet, railing against mail-in ballots expected to surge in the COVID-19 crisis. He has said he wants to block extra funds to the Postal Service.

      “Don’t pay any attention to what the president is saying, because it is all designed to suppress the vote,” Pelosi said at the Capitol.

      Pelosi called the Postal Service the nation’s “beautiful thread” connecting Americans and said voters should “ignore” the president’s threats.

      The daylong session came as an uproar over mail disruptions puts the Postal Service at the center of the nation’s tumultuous election year, with Americans rallying around one of the nation’s oldest and more popular institutions. Millions of people are expected to opt for mail-in ballots to avoid polling places during the coronavirus pandemic.

      Ahead of voting the president tweeted, “This is all another HOAX.”

      More than two dozen Republicans broke with the president and backed the bill, which passed 257-150. Democrats led approval, but the legislation is certain to stall in the GOP-held Senate. The White House said the president would veto it.

      Facing a backlash over operational changes, new Postmaster General Louis DeJoy testified Friday in the Senate that his “No. 1 priority” is to ensure election mail arrives on time.

      But the new postal leader, a Trump ally, said he would not restore the cuts to mailboxes and sorting equipment that have already been made. He could not provide senators with a plan for handling the ballot crush for the election. DeJoy is set to return Monday to testify before the House Oversight Committee.

      “The American people don’t want anyone messing with the post office,” said Rep. Carolyn Maloney, D-N.Y., the chair of the Oversight Committee and author of the bill. “They just want their mail.”

      But Republicans countered that complaints about mail delivery disruptions are overblown, and no emergency funding is needed right now.

      “It’s a silly, silly bill,” said Rep. Tom Cole, R-Okla.

      Despite the postmaster general’s vow election mail will arrive on time, Democrats remain skeptical. Maloney’s committee on Saturday released internal Postal Service documents warning about steep declines and delays in a range of mail services since early July, shortly after DeJoy took the helm. He acknowledged at the Senate hearing there has been a “dip” in service, but disputed reports of widespread problems. The Board of Governors of the Postal Service announced a bipartisan committee to oversee mail voting.

      The bill would reverse the cuts by prohibiting any changes made after January, and provide funds to the agency.

      In a memo to House Republicans, leaders derided the legislation as a postal “conspiracy theory” act. Many GOP lawmakers echoed such sentiments during a lively floor debate.

      “I like the post office, I really do,” said Rep. Glenn Grothman, R-Wis. But he said, “We have no crisis here.”

      Nevertheless, Senate Republican leader Mitch McConnell is eyeing a $10 billion postal rescue as part of the next COVID-19 relief package. While Trump has said he wants to block emergency funding for the agency, the White House has said it would be open to more postal funding as part of a broader bill.

      Hundreds of lawmakers returned to Washington for the weekend session, but dozens cast votes by proxy under House rules that allow them to stay away during the COVID-19 crisis. Another lawmaker, Rep. Dan Meuser, R-Pa., announced Saturday he had tested positive for the virus.

      Trump’s chief of staff, Mark Meadows, was on Capitol Hill meeting Saturday with GOP House leader Kevin McCarthy and other lawmakers, according to a Republican aide granted anonymity to discuss the private sessions.

      The Postal Service has been struggling financially under a decline in mail volume, COVID-19-related costs and a rare and cumbersome congressional requirement to fund in advance its retiree health care benefits.

      For many, the Postal Service provides a lifeline, delivering not just cards and letters but also prescription drugs, financial statements and other items that are especially needed by mail during the pandemic.

      The postal board of governors, appointed by Trump, selected DeJoy to take the job as postmaster general. A GOP donor, he previously owned a logistics business that was a longtime Postal Service contractor. He maintains significant financial stakes in companies that do business or compete with the agency, raising conflict of interest questions.

      In a statement, the Postal Service said DeJoy has made all required financial disclosures, but he might have to divest some holdings if conflicts arise.

      Republicans have long sought changes to have the agency run more like a private company, and Trump often complains the Postal Service should be charging Amazon and other companies higher rates for package deliveries. The founder of Amazon, Jeff Bezos, also owns The Washington Post, a publication that Trump frequently derides as “fake news” over critical stories of him.

      Others say the Postal Service is not expected to be solely a money-making enterprise, often delivering to far-flung places where it is not efficient to operate.

      Associated Press writers Anthony Izaguirre in Charleston, W.Va., and Christina A. Cassidy in Atlanta contributed to this report.

      The Associated Press produced this coverage with support from the Carnegie Corp. of New York.

      Source: www.chicagotribune.com

      Author: LISA MASCARO and MATTHEW DALY


      Stock's strong sales continue in July

      Stock’s strong sales continue in July

      Stock Development is maintaining a terrific sales pace through the summer, registering another 28 sales in July worth $41.8 million.

      According to Brian Stock, CEO of Stock Development, sales are up by one-third over July 2019 and revenue is up 62 percent.

      “Our sales have been exceptional all year and July is no exception,” said Stock. “We have recorded 220 new home sales worth $313.1 million for the year. Sales contracts are up 15.9 percent for the year and sales revenue is up 32.1 percent.”

      Stock said that COVID-19 is changing homebuyers’ needs and behaviors.

      “A lot of people are re-thinking their lives and spending more time at home,” said Stock. “They are looking ahead to winter and want a single-family home that allows them to enjoy the outdoors. This makes Southwest Florida a very popular place and our home designs, with spacious outdoor living areas, are perfectly suited to fit that lifestyle change.”

      Stock currently has more than 30 furnished models open in the seven communities of Quail West, WildBlue, Naples Reserve, Isles of Collier Preserve, Fiddler’s Creek, Pine Ridge Estates and Babcock Ranch. Visit www.stockdevelopment.com for details.

      Brian Stock said the company is opening even more models for homebuyers to tour and has begun construction on many more for the upcoming winter season.

      “Our construction division has been very busy this summer,” said Stock. “New models have already been opened in Fiddler’s Creek, Isles of Collier Preserve, Quail West and WildBlue. In addition, we have more models coming at Naples Reserve, Isles of Collier Preserve and WildBlue. We are also building inventory homes in these communities, as well as at Babcock Ranch.”

      Stock’s homes are priced from the $600s to more than $9 million in plans ranging from 2,500 to 6,500 square feet under air.

      Naples Reserve is a gated community midway between Naples and Marco Island along the U.S. 41 Tamiami Trail/Collier Boulevard. This spectacular, amenity-rich waterfront community is minutes from Downtown Naples and the beaches.

      Stock Development has three neighborhoods open in Naples Reserve. Eight models are open and three more are under construction!

      The Canoe Landing neighborhood consists of 64 homesites, nearly all of which offer waterfront views. Home and homesite packages begin from just the low-$500s.

      Bimini Isle is an intimate neighborhood of only 35 high-end homes from Stock’s renowned Signature Series. This private enclave is situated along an elegant cul-de-sac that is surrounded by three lakes. Four new beautifully-furnished models are open in Bimini Isle. Prices in Bimini Isles begin in the $700s.

      Crane Point is a neighborhood of 85 homes dominated by stunning water vistas. It is almost completely encircled by the shimmering waters of Naples Reserve’s largest lake and features lush landscaping. In the center of the neighborhood is yet another lake. Homes are base priced from just the $500s.

      At Fiddler’s Creek, Stock Signature Homes is building within the exclusive gated village of Marsh Cove. The Livorno and Capistrano neighborhoods are nearly sold out!

      Capistrano features three spacious floorplan options with extraordinary flexibility of design and options.

      The Cambria III model has 2,627-square-feet under air and 4,033 total-square-feet. It includes three-bedrooms, three and one-half baths, a large great room, island kitchen and a large screened and covered lanai. This outdoor living area features a summer kitchen with fireplace, pool and spa. The plan also includes a three-car garage and has an interior deisgn by Pizzazz Interiors. Stock’s floorplans at Fiddler’s Creek are priced from the mid-$600s.

      Quail West is the premier golf and resort-lifestyle community in North Naples. Stock has only two furnished models remaining and both are available for immediate occupancy! (Only the Newport Remains)

      Among them is the Newport, a four-bedroom plus study/four full-bath/two half-bath home with 5,837 square feet under air and 9,038 total square feet including two two-car garages, and walls of glass that retract back in two directions to the outdoor living area with large under-roof seating area. It includes an interior design and furnishings by Beasley and Henley Interior Design.

      The Isles of Collier Preserve has been a big hit with homebuyers and Stock Signatures Homes provides an amazing array of choices in the community. Stock has a new Covington III model and a new Cambria III model open and an Easton III and a Cocoplum model nearing completion. The luxury coastal lifestyle community features The Isles Club, with a boathouse, dock and kayak launch, and the newly opened Overlook Bar & Grill with waterfront views of the Cypress Waterway.

      Stock offers three series of homes, many of which are on display in its 10 furnished models.

      WildBlue is a spectacular 3,500-acre community nestled between Naples and Fort Myers in Estero. The first phase of amenities is now under construction. These are located on a spectacular peninsular site that offers expansive views of WildBlue’s largest lake. The Sports Center, which recently began construction, features more than 8,500 square foot under air with a large exercise room and state-of-the-art equipment.

      Stock’s 148 lots are situated on WildBlue Lake and offer breathtaking views, encompassing the beauty of this singular community. Stock’s pricing begins from the $900s and new homesites have been released for sale!

      Stock Signature Homes is offering nine floorplans on 85’ lots. Three furnished models are open with a new furnished Covington III model just completed and a new Sterling III model is set to begin construction soon.

      On The Peninsula, Stock Signature Homes and Stock Custom Homes are offering a variety of award-winning floorplans and custom homes designs on 102’ and 140’ lots and three opulently furnished models open for viewing.

      Please join us at our sales centers to view our best home offerings yet!

      To see all that Stock has to offer, please visit the Stock Development website at www.stockdevelopment.com/tour.   Email at info@stockdevelopment.com or call (239) 592-7344.    

      Source: www.naplesnews.com


      AP FACT CHECK: What the Dems didn’t say, and what Trump did

      AP FACT CHECK: What the Dems didn’t say, and what Trump did

      WASHINGTON (AP) – Joe Biden and fellow Democrats spun an assortment of facts to their benefit in their national convention, omitting inconvenient truths such as Barack Obama’s record of aggressive deportations and swift action by a Republican president to save the auto industry more than a decade ago.

      Meantime President Donald Trump flooded the zone with falsehoods, some so apparent that anyone with access to the internet could see the folly of them at a glance. Witness his reference to New Zealand’s “massive breakout” of COVID-19, which does not exist.

      The virtual, socially distanced Democratic National Convention was unique in history but conventional in this sense: The nominee and his supporters at times exaggerated the good, played down the bad and glossed over important context.

      But overall the discipline was discernible, as it usually was for the biggest speeches of Republican and Democratic leaders alike before the rise of Trump. Even Biden, a gaffe machine in the old days, displayed that control. The off notes came largely from what Democrats didn’t say.

      A sampling from the past week’s rhetoric as the Republican National Convention prepares to affirm Trump as the 2020 nominee in coming days:

      IMMIGRATION

      BARACK OBAMA: “We are born of immigrants. That is who we are. Immigration is our origin story.” – convention video Wednesday celebrating immigration, showing historical scenes and one that appeared to be of Trump’s border wall.

      BARACK OBAMA: “I understand why a new immigrant might look around this country and wonder whether there’s still a place for him here.” – convention speech Wednesday.

      THE FACTS: The facts here are not in dispute. But an omission stands out: Obama aggressively enforced border controls and deported nearly 3 million people.

      He changed his approach, acting without Congress in 2012 to let people who came to the U.S. illegally as children stay and work legally in the country.

      Still, that year was Obama’s high mark for deportations, more than 400,000, far outpacing Trump’s deportations in each of his first three years.

      “This whole immigration video was like putting salt on the wound,” tweeted Erika Andiola, an advocate from RAICES, an immigration legal services group in Texas. “Narrated by Obama? Come on.”

      She said: “I am angry because it was his administration who almost deported my mother and then Trump came to try to deport her again.”

      Immigration activist Julissa Natzely Arce Raya, author of “My (Underground) American Dream,” saw hypocrisy at work, after the video of Estela Juarez, the 11-year-old girl whose mother was deported to Mexico.

      “Obama did a lot of things right, but not immigration, he didn’t get that right,” she tweeted. “I promise you, tonight there is a Estela whose mom was deported by Obama.”

      ___

      MICHELLE OBAMA, on Americans: “They watch in horror as children are torn from their families and thrown into cages.” – Democratic convention Monday.

      THE FACTS: The reference to cages is misleading and a matter that Democrats have persistently distorted.

      Trump used facilities that were built during the Obama-Biden administration to house children at the border. They are chain-link enclosures inside border facilities where migrants were temporarily housed, separated by sex and age.

      At the height of the controversy over Trump’s zero-tolerance policy at the border, photos that circulated online of children in the enclosures generated great anger. But those photos, by The Associated Press, were taken in 2014 and depicted some of the thousands of unaccompanied children held by Obama.

      When that fact came to light, some Democrats and activists who had tweeted the photos deleted their tweets. But prominent Democrats have continued to cite cages for children as a distinctive cruelty of Trump.

      The former first lady was correct, however, in addressing the removal of children from parents at the border.

      The Obama administration separated migrant children from families under certain limited circumstances, like when the child’s safety appeared at risk or when the parent had a serious criminal history. Family separations as a matter of routine came about because of Trump’s “zero tolerance” enforcement policy, which he eventually suspended because of the uproar. Obama had no such policy.

      ___

      TRUMP: “Joe Biden has pledged to abolish immigration enforcement.” – rally Tuesday in Yuma, Arizona.

      THE FACTS: No he hasn’t.

      Biden has been notably outspoken in arguing that crossing the U.S. border illegally is a crime and should remain punished as such in federal court. He did not endorse immigration plans supported by Vermont Sen. Bernie Sanders and other former presidential candidates that sought to decriminalize illegal border crossings and make doing so only a civil offense.

      In addition to misrepresenting Biden’s agenda, Trump ignored the fact that the Obama-Biden administration vigorously deported people, drawing fierce criticism from some advocates for immigrants.

      ___

      TRUMP: “They want to take the wall down, they don’t want to have borders.” – Arizona rally.

      THE FACTS: No, Biden is not pushing to take down the wall or erase borders.

      Biden’s immigration plan does not include money for new border fencing, and he isn’t calling for any new walls. But he hasn’t proposed taking down what’s there.

      ___

      PANDEMIC

      TRUMP on New Zealand and the coronavirus: “They had a massive breakout yesterday.” – remarks Thursday in Old Forge, Pennsylvania.

      TRUMP: False. New Zealand has had nothing resembling a massive outbreak or, as he also put it during the week, even a “big surge” or a “big outbreak.”

      New Zealand reported five to 13 new cases each day in the past week, as of Friday. The U.S. reported an average of some 46,000 per day during the week.

      Trump is unhappy that New Zealand’s success in controlling the virus, through its tight and early rules on distancing and closures, has been used for unfavorable comparisons with his pandemic response. New Zealand went for several months without any new, confirmed cases of locally spread COVID-19 before infection started showing up again in small numbers.

      The infection, as of Friday, had killed 22 people in New Zealand and 174,000 in the U.S.

      That’s a rate of 4.5 deaths per million in New Zealand and 532 per million in the U.S.

      ___

      ECONOMY

      BIDEN: “Nearly one in six small businesses have closed this year.” – acceptance speech Thursday.

      THE FACTS: That appears to be in the ballpark but is misleading. What he didn’t say is that most of those businesses planned to reopen or already have.

      In a MetLife and U.S. Chamber of Commerce survey at the end of July, 86% of small businesses reported that they were fully or partially open. Among those that remained shut, most planned to reopen when they could. Overall, small businesses expressed guarded optimism while worrying what would happen if another wave of the coronavirus comes.

      ___

      GRETCHEN WHITMER, Michigan governor: “In 2009, the Obama-Biden administration inherited the worst economic crisis since the Great Depression. The auto industry – on the brink of collapse. A million jobs at stake. But President Obama and Vice President Biden didn’t waste time blaming anybody. … They brought together union members, companies and lawmakers on both sides of the aisle, and they saved the auto industry.” – Democratic National Convention on Monday.

      THE FACTS: She’s assigning too much credit to the Obama administration for saving the auto industry. What Obama did was an expansion of the initial, pivotal steps taken by Obama’s predecessor, George W. Bush.

      In December 2008, General Motors and Chrysler were on the brink of financial collapse. The U.S. was in a deep recession and U.S. auto sales were falling sharply, in part because the 2008-2009 financial crisis made it harder for would-be auto buyers to get a car loan. GM, Chrysler and Ford requested government aid, but Congress voted it down.

      With barely a month left in office, Bush authorized $25 billion in loans to GM and Chrysler from the $700 billion bailout fund that was initially intended to save the largest U.S. banks. Ford decided against taking any money. After Obama was inaugurated, he appointed a task force to oversee GM and Chrysler, both of which eventually declared bankruptcy, took an additional roughly $55 billion in loans, and were forced to close many factories and overhaul their operations.

      All three companies recovered and eventually started adding jobs again.

      ___

      IRAN NUCLEAR DEAL

      TRUMP: “This deal funneled tens of billions of dollars to Iran – $150 billion, to be exact – plus $1.8 billion in cash. … He (Obama) gave $1.8 billion in cash.” – news briefing Wednesday.

      THE FACTS: This is a familiar and hyper-distorted tale. There was no $150 billion payout from the U.S. treasury or other countries.

      When Iran signed the multinational deal to restrain its nuclear development in return for being freed from sanctions, it regained access to its own assets, which had been frozen abroad. Iran was allowed to get its own money back. The deal was signed in 2015; Trump has taken the U.S. out of it.

      The $1.8 billion is a separate matter. A payout of roughly that amount did come from the U.S. treasury. It was to cover an old IOU.

      In the 1970s, Iran paid the U.S. $400 million for military equipment that was never delivered because the government was overthrown and diplomatic relations ruptured. After the nuclear deal, the U.S. and Iran announced they had settled the matter, with the U.S. agreeing to pay the $400 million principal along with about $1.3 billion in interest.

      ___

      TRUMP: “And we got nothing, except a short-term, little deal. A short-term, expiring.” – news briefing Wednesday.

      THE FACTS: Trump’s wrong to suggest the deal had no impact before he withdrew the U.S. from the agreement in 2018.

      Iran was thought to be only months away from a bomb when the deal came into effect. But during the 15-year life of most provisions of the accord, Iran’s capabilities are limited to a level where it cannot produce a bomb. The deal also includes a pledge by Iran never to seek a nuclear weapon.

      The International Atomic Energy Agency and his administration itself had confirmed Iran was complying with the terms before Trump pulled out of the deal.

      The pact does gradually lift some restrictions, including limits on centrifuges that were due to expire in 2025.

      After the 15 years are up, Iran could have an array of advanced centrifuges ready to work, the limits on its stockpile would be gone and, in theory, it could then throw itself fully into producing highly enriched uranium. But nothing in the deal prevented the West from trying to rein Iran in again with sanctions.

      ___

      JOHN KERRY, former secretary of state: “We eliminated the threat of an Iran with a nuclear weapon.” – Democratic convention on Tuesday.

      THE FACTS: That’s taking it too far. The threat was deferred, not eliminated. That reality was baked into the deal negotiated when Kerry was Obama’s secretary of state. The accord limited Iran’s capabilities to a level where it could not produce a bomb, but most provisions were to expire after 15 years.

      ___

      POSTAL SERVICE

      TRUMP: “One of the things the Post Office loses so much money on is the delivering packages for Amazon and these others. Every time they deliver a package, they probably lose three or four dollars. That’s not good.” – remarks Monday to reporters.

      THE FACTS: That’s not true.

      While the U.S. Postal Service has lost money for 13 years, package delivery is not the reason.

      Boosted by e-commerce, the Postal Service has enjoyed double-digit increases in revenue from delivering packages, but that hasn’t been enough to offset pension and health care costs as well as declines in first-class letters and marketing mail. Together, letters and marketing mail in recent years have comprised up to two-thirds of postal revenue.

      In arguing that the Postal Service is losing money on delivering packages for Amazon, Trump appears to be citing some Wall Street analyses that argue the Postal Service’s formula for calculating its costs is outdated. A 2017 analysis by Citigroup did conclude that the service was charging below market rates as a whole on parcels. Still, federal regulators have reviewed the Amazon contract with the Postal Service each year and found it profitable.

      To become financially stable, the Postal Service has urged Congress for years to give it relief from the mandate to prefund retiree health benefits. Legislation in 2006 required the Postal Service to fund 75 years’ worth of retiree health benefits, at an estimated cost of $5 billion per year, something that the government and private companies don’t have to do.

      In the most recent quarter, for instance, package delivery rose 53% at the Postal Service as homebound people during the pandemic shifted online for their shopping. But the gain in deliveries was offset by the continued declines in first-class mail as well as costs for personal protective equipment and to replace workers who got sick during the pandemic.

      The biggest factor was the prepayment of retiree health benefits, which Congress imposed and only Congress can take away.

      As a quasi-government agency, the Postal Service also is required under law to provide mail delivery to millions of U.S. residences at affordable and uniform rates. It does not use taxpayer money for its operations and supports operations with the sales of stamps and other mail products.

      ___

      TRUMP: “We want to make sure that the Post Office runs properly and it hasn’t run properly for many years, for probably 50 years. It’s run very badly. So we want to make sure that the Post Office runs properly and doesn’t lose billions of dollars.”- remarks Monday to reporters.

      THE FACTS: Trump offered no evidence of broad mismanagement at the Postal Service that dates back 50 years.

      The Postal Service started losing “billions,” as Trump put it, after the 2006 law mandating health prefunding took effect. Those billion-dollar payments, which coincided with the 2007-2008 Great Recession and a wider shift toward online bill payments, pushed the Postal Service into the red. Excluding those health payments, it has finished each year with revenue surpluses for most of the past decade.

      ___

      WAGES

      HILDA SOLIS, former labor secretary, on Biden: “He and President Obama made it easier for home-care workers to organize. They extended overtime pay to more than 4 million workers.” – Democratic convention Wednesday.

      THE FACTS: No, Obama and Biden tried to extend overtime pay to an estimated 4 million workers, but it never happened.

      The Obama administration completed such a rule in May 2016, but it was ultimately blocked by a federal judge after 21 states sued the Labor Department.

      In 2019, the Trump administration extended overtime for an estimated 1.3 million workers in home health care, retail, fast food and certain other low-wage jobs.

      ___

      BERNIE SANDERS, Vermont senator: “Joe supports raising the minimum wage to $15 an hour. This will give 40 million workers a pay raise and push the wage scale up for everyone else.” – Democratic convention Monday.

      THE FACTS: Not likely. He’s taking an optimistic projection as a certainty.

      He’s referring to a 2019 study by the Economic Policy Institute, a left-leaning think tank that estimated $15 an hour by 2025 would directly raise wages for 28 million and indirectly for 11 million. Even that study doesn’t say wage scales would go up for “everyone.”

      A July 2019 report from the nonpartisan Congressional Budget Office found a much less significant impact, and some likely costs, from a $15 federal minimum.

      The office said 1.3 million workers could be priced out of the market and lose their job if a $15 minimum wage were federally mandated. It also projected far fewer workers – roughly 27 million total – would see a pay increase as a result.

      ___

      FLOYD PROTESTS

      TRUMP, on unrest in Minnesota after George Floyd died in the custody of Minneapolis police: “When I sent in the National Guard, that’s when it all stopped.” – speech Monday in Mankato, Minnesota.

      THE FACTS: False. Gov. Tim Walz, a Democrat, deployed the Minnesota National Guard, not Trump. The president didn’t send forces to the streets in Minnesota. He repeatedly claims that he did.

      In the speech, Trump went on to say he urged Minnesota officials to deploy the Guard and “they should have done it a lot sooner,” thereby acknowledging, if indirectly, that the order wasn’t his. But Walz said he mobilized the Guard at the request of city officials, not because Trump wanted him to.

      ___

      TRADE

      TRUMP, on China’s adherence to the trade deal his administration negotiated with Beijing: “They are living – they’re more than living … up to it. … Because they know I’m very angry at them.” – “Fox & Friends” interview Monday.

      THE FACTS: That’s not true. China is falling well short of its commitments under the trade deal.

      The Peterson Institute for International Economics, which has been tracking China’s purchases, found this month that U.S. exports of goods to China should have totaled $71.3 billion from January through June to be on track to reach this year’s target under the Phase 1 deal. Instead, they topped out at $33.1 billion, only 46% of what they should be.

      The shortfall in promised Chinese purchases of U.S. farm products is even bigger. Those purchases totaled $6.5 billion, only 39% of purchases that should have reached $16.7 billion through June.

      The gap is perhaps not surprising, given that world trade has been badly disrupted by the coronavirus pandemic. But Trump did not negotiate provisions giving China leeway in any downturn. It’s conceivable, if unlikely, that Chinese purchases will pick up in the second half of the year enough to make up for the shortfall.

      But in no sense is China more than living up to the deal now.

      ___

      Associated Press writers Paul Wiseman and Matthew Daly in Washington and Amanda Seitz in Chicago contributed to this report.

      ___

      EDITOR’S NOTE – A look at the veracity of claims by political figures.

      ___

      Find AP Fact Checks at http://apnews.com/APFactCheck

      Follow @APFactCheck on Twitter: https://twitter.com/APFactCheck

      Copyright © 2020 The Washington Times, LLC.

      Source: www.washingtontimes.com

      Author: The Washington Times http://www.washingtontimes.com


      The Postal Service may need a bailout. But it's actually making tons of cash


      Leave a Comment