Summer is my favorite time of year because Congress leaves town and I get to breath a little sigh of relief. Summer also means that the Taxpayers Prot

Summer is my favorite time of year because Congress leaves town and I get to breath a little sigh of relief. Summer also means that the Taxpayers Protection Alliance assigns summer reading to members of Congress and bureaucrats. The 2022 Summer Reading starts with the United States Postal Service. Before I get into that, I need to address the elephant in the room, the Inflation Reduction Act (aka, the renamed Build Back Better). The name, Inflation Reduction Act, reminds me of a friend I had in High School, let’s call him Jim. Jim was a very nice kid but weighed roughly 400 pounds. His nickname was “Tiny." He thought it was funny and didn’t mind it. Well, Congress does the same thing, name pieces of legislation the exact opposite of what they are. For example, The Affordable Care Act made healthcare less affordable as premiums skyrocketed. Now, the Inflation Reduction Act will, in fact, not reduce inflation. It is a tax and spend bill that will make inflation worse.

Summer Reading – The United States Postal Service

Congratulations, lawmaker… you’ve successfully located the one beach that no one else has managed to find. This seclusion, though, comes at a cost. Your cell phone network isn’t cooperating, and you need to stay in contact with your family (and constituents) from your sandy paradise. There’s always the U.S. Postal Service (USPS), which has prided itself on delivering mail between even the hardest-to-reach places. Unfortunately, the mail service isn’t what it used to be. The USPS is busy implementing a plan to slow down a significant percentage of first-class mail, and repeated price hikes have hampered affordability and consumer access. Some lawmakers have opted to subsidize this failed approach and write a blank check to absolve the agency of its massive liabilities. An alternative approach is needed to get America’s mail carrier delivering for the American people (and lawmakers on vacation) again. The USPS has been bleeding red ink at an alarming pace. Over the past 15 years, the
agency has lost more than $90 billion. To make up for this astounding total, the USPS would need to sell at least 10 years’ worth of first-class stamps without incurring any expenses whatsoever. And, even then, the agency would not be back in the black. According to the Government Accountability Office, the USPS has roughly $200 billion worth of unfunded liabilities and debt, a total equal to roughly 250 percent of the agency’s annual revenues. Congress saw the severity of this fiscal crisis and acted by passing the Postal Service Reform Act (PSRA). But, as is usually the case, lawmakers’ actions made the situation worse.

At its core, PSRA is a bailout. It wipes away $57 billion in defaulted debt that the Postal Service has failed to pay for its Retiree Health Benefits Fund since 2011. PSRA does nothing to spur the service to better understand its costs so that it cut them where appropriate and more accurately charge customers for the actual cost of the product or service being used. One might think that, in exchange for a lavish bailout from Congress, the USPS would at least commit to reasonable delivery times and service standards. In reality, the agency is actively slowing down mail delivery even as it receives a blank check from taxpayers. Despite the claims of postal leadership, this service slowdown won’t even do much to help the USPS cut down on operating expenses. Here’s an excerpt from TPA’s analysis of USPS’ plan to slow down approximately 40 percent of first-class mail: “The USPS predicts that slowing down the mail and substituting air transportation in favor of highway transportation will save
the agency roughly $169 million on net per year. Even taking this figure at face value, these cost savings do not amount to much during a fiscal year (FY). The PRC notes ([link removed]) , ‘[t]he Postal Service’s projected net cost savings of $169 million represents 3.4 percent of total transportation costs for FY 2020 and less than a quarter of one percent of the total FY 2020 operating expenses of [$]82 billion.’” Not only will the savings be miniscule, but the sullied reputation of America’s mail carrier may pose serious financial issues down the road as consumers continue to stop their reliance on the postal system.

The USPS’ recently enacted stamp price hikes give consumers yet another reason to ditch the mail. On July 10, the USPS increased postage for a 1-ounce letter from 58 cents to 60 cents. Stamp prices were also increased last August (from 55 cents to 58 cents) as part of Postmaster General Louis DeJoy’s 10-year plan to improve the beleaguered agency’s finances. Postal leadership claims that these price hikes are reasonable because they are lower than reported inflation rates. This assessment conveniently leaves out the USPS’ plan to reduce service and lengthen delivery times across the country.... The plan has moved forward despite concerns raised by consumers and the Postal Regulatory Commission. It is beyond absurd to ask families to pay more for reduced services, while doing next to nothing to keep staff and procurement costs under control. It would be one thing to ask families to pay more if the USPS’ costs and lackluster revenue were unavoidable. That is sadly far from the case. Until
recently, there was a glimmer of hope that the agency would stick to sensible procurement policies for its $6 billion mail truck purchase program and avoid costly electric vehicle (EV) purchases. But, according to a recent report by Washington Post contributor Jacob Bogage, the USPS has agreed to electrify at least 40 percent of its new fleet, up from 10 percent in the original iteration: “The Postal Service had been set to purchase as many as 165,000 vehicles from Oshkosh Defense, of which 10 percent would have been electric under the original procurement plan. Now it will acquire 50,000 trucks from Oshkosh, half of which will be EVs. It will also buy another 34,500 commercially available vehicles, with sufficient electric models to make 4 in 10 trucks in its delivery fleet zero-emission vehicles.”

As is the case so often, the USPS could have simply consulted its own Inspector General’s (IG) reporting to get a better idea of the risks and rewards of EV procurement. One IG report from March runs through different scenarios on agency EV use with detailed cost and mileage assumptions and finds that, under a wide range of cases, EV adoption would not be good for postal finances. According to the report, an EV fleet would be more expensive than conventional trucks assuming, “an average delivery route length of 24 miles per day, and 301 operating days per year.” EVs are approximately 11 percent more expensive up-front than their conventional counterparts, with cost recoupment possible down the road via reduced energy and maintenance costs. But under ordinary, plausible assumptions of mail truck use examined by the IG, 20-year total ownership costs will be higher for EVs. It is critical that the USPS avoid policies that actively make its situation worse. This means reversing course on its
misguided EV acquisition policies and recommitting to its plan for a 10 percent (or less) electric fleet. Having prices reflect costs is one significant step the agency could take to improve its finances and restore trust with its consumers. Furthermore, reversing service standard slowdowns can make the USPS money by restoring the agency’s speedy reputation.

A strong, financially resilient USPS is a good thing for everyone, from grannies sending birthday checks to lawmakers.

BLOGS:

Monday: Taxpayer Watchdog Launches Major Effort Praising Senator Sinema for her Support of Arizona Small Businesses by Opposing “Carried Interest” Tax Hike ([link removed])

Tuesday: NEW Arizona Poll Shows Senator Sinema Should Oppose Tax and Spending Bill ([link removed])

Tuesday: Time for Real Fiscal Responsibility ([link removed])

Wednesday: An Independent Review of FDA’s Tobacco Regulations Would Be Welcome as Agency Bows Down to Political Pressure ([link removed])

Thursday: National IPA Day Is Perfect Day for Biden to Can Trump Tariffs ([link removed])

Thursday: Carried Interest Proposal Would Stifle Investment in American Businesses ([link removed])

Friday: Summer Reading: Gone Postal ([link removed])

MEDIA:

August 1, 2022: WBFF Fox45 (Baltimore, Md.) interviewed me about the spending in the Inflation Reduction Act ([link removed]) .

August 1, 2022: KPVI ([link removed]) (Idaho Falls, Idaho) mentioned TPA in their piece, “Poll: Majority of Arizonans against IRS expansion package.”

August 1, 2022: The Center Square mentioned TPA in their piece, “Poll: Majority of Arizonans against IRS expansion package. ([link removed]) ”

August 1, 2022: The Yuma Daily News mentioned TPA in their piece, “Poll: Majority of Arizonans against IRS expansion package ([link removed]) .”

August 1, 2022: The Arizona Independent News Network ([link removed]) mentioned TPA in their story, “Taxpayer Watchdog Group Urging Arizona Senators Sinema And Kelly To Reject IRS Expansion Bill.”

August 1, 2022: KXAN (Austin, Texas) mentioned TPA in their story, “Ads targeting big tech bill flood Austin airwaves ([link removed]) .”

August 1, 2022: Flipboard.com mentioned TPA in their story, “Ads targeting big tech bill flood Austin airwaves. ([link removed]) ”

August 1, 2022: Inside Sources ([link removed]) ran TPA’s op-ed, “U.S. Public Health Messaging is Guiding Consumers Toward Smoking.”

August 1, 2022: I appeared on NTD Television ([link removed]) to talk about the tax provisions in the Inflation Reduction Act.

August 2, 2022: Townhall.com ([link removed]) ran TPA’s op-ed, “An FDA Scientist Jumps Ship to Help Smokers Quit.”

August 2, 2022: Issues & Insights ran TPA’s op-ed, “Antitrust Bill Will Stall Security Improvements ([link removed]) .”

August 2, 2022: I joined ‘Just the News not Noise’ with John Solomon and Amanda Head on Real America’s Voice to discuss the ‘Inflation Reduction Act.’

August 2, 2022: The Livingston Parish News (Denham Springs, LA) ran TPA’s op-ed, “OPINION | Democrats’ drug pricing deal is the wrong remedy. ([link removed]) ”

August 3, 2022: I joined ‘Real America with Dan Ball’ ([link removed]) on OANN to discuss inflation and the economy.

August 3, 2022: I appeared on ‘The Doug Wagner Show’ on WHO 1040 AM (Des Moines, Iowa) to talk about the $3.5 trillion budget bill.

August 3, 2022: An op-ed titled “Democrats’ Government Spending Dream Requires Socialist Price Controls ([link removed]) ,” in Inside Sources mentioned TPA.

August 3, 2022: The Telegraph (Nashua, NH) ran TPA’s op-ed, “U.S. public health messaging is guiding consumers toward smoking ([link removed]) .”

August 4, 2022: WBFF Fox45 (Baltimore, Md.) interviewed me about banning members of Congress from trading individual stocks.

August 4, 2022: I appeared on WBOB 600 AM (Jacksonville, Fla.) to talk about the Inflation Reduction Act and the recession.

August 4, 2022: Townhall.com ([link removed]) ran TPA’s op-ed, “Carried Interest Proposal Would Stifle Investment in American Businesses.”


Have a great weekend!
Best,
David Williams
President
Taxpayers Protection Alliance
1101 14th Street, NW
Suite 1120
Washington, D.C. xxxxxx
www.protectingtaxpayers.org ([link removed])

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