I want to thank House Minority Whip Rep. Steve Scalise (R-La.) for taking time out of his busy schedule late last week to sit down with me (virtually) and talk about a number of issues ranging from tax cuts to the World Health Organization to reopening the country safely and quickly. The video is on the Taxpayers Protection Alliance’s website and YouTube page.
Time for a Free Trade Agreement With Taiwan
The surprising yet encouraging unemployment numbers last week hopefully point to an economic rebound. Free trade is an important part of a strong economy. Inking a free trade deal with Taiwan, in particular, would let the world know that the two countries are open for business and innovation in a new, post-Coronavirus world. It would also send a powerful message to Beijing that rejecting Taiwan is no longer an option.
While trade will inevitably continue with mainland China, trust and credibility issues with the “People’s Republic” make it unwise for the U.S. to put all its eggs in one basket. Chinese officials have been known to drastically understate Coronavirus cases, and continued flare-ups can continue to shut down entire provinces. In contrast, Taiwan appears to have largely gotten a grip on its COVID-19 issues by mounting an immediate, aggressive response to the deadly disease. As early as January, the island-nation was carefully restricting travel and subjecting incoming passengers to health inspections. As the World Health Organization (WHO) shut Taiwan out of Coronavirus meetings in late January, the government was conducting hospital infection control drills and ramping up the availability of surgical masks. The results speak for themselves; there have been less than ten COVID-19 related deaths in the densely populated nation of 23 million.
Strong leadership and the prompt response allowed for the country’s citizenry to proceed with their day-to-day activities including work and business activities. Taiwan’s attention to health and continued economic strength make it a top-notch trading partner. Yet, the U.S. has repeatedly overlooked the island-nation in shopping around for free-trade agreements. This is unfortunate because a comprehensive trade deal with Taiwan would result in new, better technology for the U.S. with minimal Coronavirus-related logistical risks. It would also send a powerful message to the WHO and China that the powers-that-be simply cannot continue to ignore the powerhouse.
Taiwan has much to offer the world and should be integrated into the global economic order without delay.
Postal Problems No Laughing Matter
John Oliver can be funny, but certainly not when he blatantly disregards the facts to deliver partisan talking points. In a May segment, he took to his show, Last Week Tonight with John Oliver, to deliver some myths about the United States Postal Service (USPS).
Ok, let’s see a couple of his claims and what he got wrong:
Claim: “… experts believe [the Postal Service] would still be turning a profit were it not for a 2006 law called the Postal Accountability and Enhancement Act. Now, one of the things it required was for the USPS to prepay health care benefits for retirees on a 50-year schedule, starting with an aggressive obligation to set aside over $5 billion a year for 10 years. That, in itself, was a massive burden to put on the postal service, but the law also limited its flexibility to raise money by putting price caps on major products like first-class mail. So they had massive new obligations to meet even as their income was basically locked in place.”
Facts: While John Oliver characterizes the prefunding of the Postal Service’s healthcare benefits for retirees as a “death sentence,” this claim is not based in reality. The 2006 Postal Accountability and Enhancement Act required that, instead of funding retirees’ healthcare benefits on a pay-as-you-go basis, the USPS now had to preplan for these expenses and put aside financing ahead of time. This accounting change ensured that hard-working government employees would receive their benefits upon retirement.
After the pre-funding provision became law in fiscal year 2006, the agency’s CFO called it “a farsighted and responsible action…” And as Oliver himself points out, that funding requirement was just for the first ten years. Starting in 2017, the USPS has been allowed to amortize remaining expenses, and these annual amortization payments are only around 10 percent of annual USPS losses. That’s hardly a “death sentence.”
Claim: “what many conservatives would prefer — is for the Postal Service to be privatized. But there are some huge drawbacks to that idea. For starters — as you may have noticed — FedEx and UPS charge a lot more to deliver than the postal service does. Also, those remote addresses that they are obligated to deliver to aren’t just difficult to get to, they’re not profitable, and in all likelihood, companies would cut those routes off, meaning a lot of people would lose access.”
Facts: This false narrative is often repeated in the media without any supporting evidence. Very few analysts in the postal policy world – including those on the center-right – are advocating for privatization, but rather comprehensive reform that focuses on spending and pricing changes. As groups such as TPA have pointed out over the past few years, the business model undergirding USPS operations simply doesn’t add up. True, “competitive products” from Amazon and Walmart are contributing on average $15 billion per year more in revenue to the USPS than they did a decade ago.
But this is a far cry from the $19 billion decline in annual revenue from “market dominant products” (e.g. birthday cards). While it’s hard to say for sure exactly how much Amazon is paying USPS to ship its packages to consumers’ doorsteps, educated guesses suggest that the e-commerce giant receives approximately a 50-60 percent discount off normal postage prices. And, there’s plenty of indirect evidence that these prices don’t fully match costs. More careful pricing policies and greater pricing transparency is key to balancing the books, and ultimately a stronger USPS. This is the opposite of weakening, or attempting to privatize, the beleaguered agency.
This has to be one of the most ridiculous ideas presented in the segment, again grounded in false claims:
Claim: “Now, experts suggest post offices could expand their services to issue things like hunting and fishing licenses. And perhaps the best option is something called postal banking, where the post office doesn’t so much act as a bank as provide some very basic financial services, like savings accounts and check cashing. That wouldn’t just generate revenue — it could also help the estimated 25% of people in this country living in unbanked or underbanked communities who are otherwise often forced to turn to alternative financial services like payday lenders, which can charge up to 400% in fees and interest. And this wouldn’t be completely out of their lane.”
Facts: The agency has trouble making money on… pretty much everything, and rising package revenue is due to a skewed, unsustainable pricing formula. Nonetheless, John Oliver wants to give the beleaguered agency a foothold in the banking and small-dollar loan industries and taxpayers would be on the hook if it failed. If the postal banking experiment runs into the red, the USPS could easily teeter off the fiscal cliff and require a massive taxpayer bailout. And based on what we’ve seen from the USPS’ money order operations in recent years, it is hard for the agency to consistently maintain profitability in financial services. Even though the USPS charges at least $1.25 for each money order (for non-military consumers), they currently only make about 10 cents per transaction once costs are considered. And in 2017, the agency actually lost 5 cents per money order. Even if postal banking ekes out a minimal profit for the USPS, it certainly won’t make a dent in the agency’s $160 billion in unfunded liabilities.
As a comedian, John Oliver can be funny and entertaining. But the need for Postal reform is no joke, and Oliver must get his facts straight on the issue.
Blogs:
Monday: End qualified immunity for cops
Tuesday: States Pleading for Federal Bailout Are the Most Poorly Managed
Wednesday: Department Of Labor Gives Workers Much-Needed Flexibility For 401(k)s
Thursday: Latest “Ten Thousand Commandments” Highlights Hidden Tax System
Media:
June 2, 2020: BizNews ran TPA’s op-ed, “Irrational lockdown measures harm citizens and South Africa’s economic future.”
June 8, 2020: The Sentinel & Enterprise (Fitchburg, Mass.) ran TPA’s op-ed, “Congress can provide hand up to small businesses without ballooning budget.”
June 8, 2020: WBFF (Fox, Baltimore) interviewed me about the pros and cons of mail-in ballots.
June 8, 2020: The Sun (Lowell, Mass.) ran TPA’s op-ed, “Congress can provide hand up to small businesses without ballooning budget.”
June 8, 2020: Issues & Insights ran TPA’s op-ed, “Department Of Labor Gives Workers Much-Needed Flexibility For 401(k)s.”
June 10, 2020: The National Interest ran TPA’s op-ed, “Why a U.S.-Taiwan Free Trade Agreement Needed Now More Than Ever.”
June 10, 2020: Yahoo News ran TPA’s op-ed, “Why a U.S.-Taiwan Free Trade Agreement Is Needed Now More Than Ever.”
June 10, 2020: TPA Vice President of Policy Ross Marchand appeared on “The Justice and Lee Show” (KTLK 1130 AM; Minneapolis, MN) to talk about ending qualified immunity.
June 10, 2020: Ross appeared on “Free Fire with Carl Bott” (KCNR 96.5 FM and 1460 AM; Redding, CA) to talk about ending qualified immunity.
June 11, 2020: I appeared on KRC Radio (Cincinnati, Ohio) to talk about ending qualified immunity and state bailouts.
June 11, 2020: WBFF (Fox, Baltimore) interviewed me about Baltimore Councilman Bill Henry’s primary win to be the city’s next comptroller.
June 11, 2020: Issues & Insights ran TPA’s op-ed, “The WHO Follies, Redux.”
June 11, 2020: The American Conservative ran TPA’s op-ed, “Stop The Train! No More COVID Bailouts For Amtrak.”
June 11, 2020: Townhall ran TPA’s op-ed, “Contractors Can Save Taxpayers Billions, Bureaucrats Permitting.”
June 11, 2020: Ross appeared on “Alabama Morning News” (WERC 105.5 FM; Birmingham, AM) to talk about ending qualified immunity.
June 11, 2020: Ross appeared on “Richmond's Morning News” (WRVA 1140 AM and 96.1 FM; Richmond, VA) to talk about ending qualified immunity.
June 11, 2020: Ross appeared on the “The Diane Jones Show” (KLPW 1220 AM; St. Louis, MO) to talk about ending qualified immunity.
June 11, 2020: Ross appeared on “Connecticut Today” (WICC 600 AM; Hartford, CT) to talk about ending qualified immunity.
June 11, 2020: Ross appeared on “The Monica Jaye Show” (KKFT 99.1 FM and 92.3 FM; Reno and Carson City, NV) to talk about ending qualified immunity.
Have a great weekend, stay safe, and as always, thanks for your continued support.
Best,
David Williams
President
Taxpayers Protection Alliance
1401 K Street, NW
Suite 502
Washington, D.C. xxxxxx
www.protectingtaxpayers.org
