What Joe Biden's Changes to USPS Leadership May Mean for Marketers

Public perception that everything about the government changes once a new president takes office is especially untrue for the United States Postal Service. However, whether or not he approves of them, President-elect Joe Biden can't stop the looming postage rate increases of 1.8% for First Class mail and 1.5% for other categories slated to take effect Jan. 24. That said, Biden can influence the future of the USPS in a way that will significantly impact performance and direct marketers who, as of Sept. 30, sent 15% fewer pieces of marketing mail (for a loss of $2.45 billion in revenue to the USPS) and 19% more packages (for a revenue gain of $5.8 billion) than the year before. What Biden can do in the short term The fastest change the new president can make in the independent government agency is one he’s already put in motion by naming a five-member agency review team to advise him about the USPS and the Postal Regulatory Commission. (The PRC reviews aspects of postal service actions, such as decisions to raise postage rates.) Biden could appoint enough members to the USPS Board of Governors to create a 5-4 majority in favor of Democrats. With that new board and postmaster general Louis DeJoy voting, the governors could then appoint a deputy postmaster general, creating an 11-member board that could have 6-5 votes along party lines. (The postmaster general and deputy PMG are voting members.) This board influences most of what USPS does. It decides on everything from postage rates to union negotiations, facility closures and postmaster general appointments. It was the board that approved President Donald Trump’s ally DeJoy, not Trump himself. DeJoy began his controversial tenure as postmaster general and CEO on June 15. At the time, the board had four members of a possible 11, all of them Trump appointees. Biden can appoint four new members, who must then be approved by the Senate—which refused to do so for former President Barack Obama. That and term limits are why all current governors are Trump appointees, including the board’s two Democrats. Why would Trump appoint Democrats? The board rules state only five of the nine main board members can be from the same party. There hasn't been a full board in a decade; there were even times during Obama’s presidency that the board didn’t even have a quorum. And Democrat Ron Bloom’s term ended Dec. 8. That means unless Trump can appoint board members and get Senate approval before Jan. 20, Biden can choose his own candidates. Ronald Stroman, who resigned as deputy postmaster general two days after the announcement that DeJoy would be postmaster, is leading Biden’s USPS transition team. While it’s possible Stroman could rejoin the board, there’s also an opening on among PRC leadership that had been 3-2 Trump-Obama appointees. Biden’s long-term plans for the postal service The USPS needs reform and financial help. This summer's crisis of faith in the ability of the USPS to deliver record numbers of absentee ballots was brought on by a long-simmering issue having nothing to do with delivering mail. The 2006 Postal Accountability and Enhancement Act's mandate to pre-fund retirement health care costs for USPS employees, a burden not imposed on any other federal agency or private company. While the coronavirus crisis has helped boost business at the USPS, Congress didn’t approve $25 billion in pandemic relief for the agency earlier this year, and another Democrat-proposed measure for emergency funding over the summer also didn't pass. However, there's hope for the agency: Biden promised in a postal union interview to revoke the requirement to fund pre-retirement benefits. The main reason USPS is getting an aid package matters for marketers is the postal service is getting closer to being able to set rates that match its costs. Not dealing with the USPS' costs could lead to significant rate hikes beyond the ones looming in the new year, and without any changes, the USPS expects to run out of cash by October 2021.