second stimulus bill provides unconditional aid for USPS
by Rockwell Sands @

Congress Approves Second Stimulus Bill, Unconditional Aid for USPS

Second federal stimulus bill amends language around $10 billion provision for Postal Service, eliminates conditions previously set in CARES Act

After months of gridlock on the debate floor, Congress has voted in favor of a second stimulus bill. This $900 billion will include $600 checks to every American earning below $75,000/year, and will provide an additional $300/week in unemployment benefits. It will also reopen the Paycheck Protection Program for small businesses to abate further economic damage from the ongoing Coronavirus pandemic. In terms of postal matters, the new bill also eliminates previous conditions around the $10 billion in federal aid meant to go to USPS.

The Second Stimulus Bill Provides $10 Billion of Aid for USPS with No Strings Attached

This second bill, currently unnamed, is the second-largest stimulus bill after the $2 trillion CARES Act passed in March. That first bill included a $10 billion loan that USPS could withdraw to aid the struggling agency…but not without certain strings attached. In order to secure access to the credit line, the US Treasury made USPS executives agree to unfavorable conditions and release long-held proprietary information. One such condition required USPS to reveal the holders of the agency’s 10 biggest Negotiated Service Agreements (or NSA’s), which, legally, the Postal Service doesn’t have to do.

Now, as part of this second stimulus bill that Congress just passed, USPS can draw on that $10 billion loan without providing any proprietary information at all. Also, by definition, this loan isn’t much of a “loan” at all. Tapping into the $10 billion, if USPS chooses to do so at all, won’t require them to pay it back to the federal government. However, that $10 billion is reserved only for operational expenses that USPS has taken on due to the coronavirus pandemic; the Postal Service can’t use any of that money to pay down its preexisting debt from the pre-funding mandate of 2006.

USPS Could Use the Financial Nudge

Going into the holidays, USPS is about as maxed out as it can be. A record-breaking eCommerce season and a new surge of COVID-19 cases have both led to historic package volumes this winter. Overwhelmed in their networks, other carriers like FedEx and UPS have capped shipments from retailers, and have begun turning parcels away. Unlike UPS and FedEx, however, USPS legally can’t do that. So, all of those excess packages fall to the Postal Service, and now, USPS faces the worst backlog in its history.

The pre-funding burden and mountains of debt that USPS took on obviously didn’t contribute to the strains on its network. The current backlog was the perfect storm of strained resources from a new COVID-19 surge, and crippling package volume. Still, if USPS had the budget to properly invest in its infrastructure over the past few years, there’s no telling how much more prepared it would have been to handle the current wave of parcels. Instead, packages now sit in USPS facilities for extend periods of time, and millions of gifts this year may arrive later than Christmas.

Moving forward, perhaps the ability to freely tap into this $10 billion will help USPS clear up its network and get mail and packages moving in a timely manner again.

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