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AUGUST

**18, 2020**

Dayen on TAP

Treasury's Role in the Postal Sabotage

After the House and Senate scheduled hearings

with Postmaster General (and frequent donor to Senate Republicans
)
Louis DeJoy, he rhetorically gave up
on his
operational efforts that have slowed down the mail, saying he is
"suspending these initiatives until the election is concluded." This
includes changes to retail hours at post offices, removal of sorting
machines and post office boxes, closures of processing facilities, and
restrictions on overtime.

This is a welcome development that shows what a dedicated opposition can
accomplish, even without the levers of power. But it all needs to be
verified, and the previous changes, like with mailboxes and sorting
machines, need to be reversed. And congressional Democrats should still
scrutinize how DeJoy's appointment sprang from a bit of financial
extortion.

In March, Democrats sought federal funding for the Postal Service, which
usually sustains itself through its own revenue. Eventually, Congress
approved a $10 billion line of credit, but left it to the discretion of
the Treasury Department. This was a mistake.

Steven Mnuchin, the Treasury secretary, immediately took the opportunity
to demand "sweeping operational changes
"
to the Postal Service, using the $10 billion loan as bait. Treasury
sought influence in postal pay and benefits, the terms of large
contracts, and hiring decisions like the next postmaster general, which
happened to be open at the time.

Support Independent, Fact-Checked Journalism

DeJoy's predecessor, Megan Brennan, announced her retirement last
October
,
well before the pandemic. In normal circumstances, the USPS Board of
Governors does the hiring. But there appears to have been interference
from Treasury. One reason we know this is that David Williams, vice
chair of the Board of Governors, abruptly resigned his position

in May. I reported at the time that this was in protest of the Board of
Governors caving to Treasury on handing over effective operational
control
.
(Williams will brief

the House Progressive Caucus later this week on what he knows.)

Reports have indicated

that Mnuchin was "involved in recruiting DeJoy." Treasury released the
$10 billion line of credit on July 29, after DeJoy's appointment and
on the same day that the USPS informed 46 states

that mail-in ballots could be delayed and disrupt the election.

DeJoy's actions since his hiring align with the demands Treasury was
reportedly seeking. DeJoy reshuffled senior management; Treasury wanted
a say in staffing. DeJoy canceled overtime for postal employees;
Treasury wanted to reduce postal pay and benefits. For the full
blueprint, scour Treasury's task force proposal

on the USPS, which union leaders presciently warned

would "slow down service, reduce delivery days and privatize large
portions of the public Postal Service."

Meanwhile, the line of credit has sat unused since July 29
,
even as the House prepares legislation for a $25 billion USPS grant
.
Treasury decreed that the line of credit cannot be tapped until USPS's
cash balance falls below $8 billion; right now it sits at $13 billion
.
One reason for that is ... Louis DeJoy blocking overtime and carrying
out operations with understaffed personnel. Reversing the managerial
changes (which DeJoy promised, and the House bill would also accomplish)
will intensify the need for more funding, with less than three months to
Election Day.

The evidence is strong, though circumstantial, that the Treasury
Department, under Trump's direction, used a $10 billion lifeline to
install a saboteur at the U.S. Postal Service. Democrats should keep
digging. Maybe Secretary Mnuchin needs to sit alongside his star recruit
DeJoy.

~ DAVID DAYEN

Follow David Dayen on Twitter

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