The Trump ally who still heads the Postal Service will soon answer to Congress over delays

Feb 19, 2021
In The News

Louis DeJoy became a household name last year when he, as Postmaster General, faced criticism over delays in U.S. mail, especially around the time when mail-in ballots would prove critical in the presidential election.

While many of former President Trump’s allies have since moved on to think tanks or their own runs for political office or even SPACs, DeJoy remains as the nation’s Postmaster General.

It's not that President Joe Biden or other Democrats are suddenly fans of the longtime Trump donor, it’s thanks to the quirks of how his position is filled.

His days in office are likely numbered, but in the meantime his opponents appear determined to make his life difficult. A hearing in Congress is scheduled for next week and aides have confirmed that Postmaster DeJoy and others will be in attendance.

DeJoy’s appearances last year before Congress were marked by open hostility and fights over everything from the Post Office’s future to the price of a postcard.

House Oversight Chairwoman Carolyn Maloney (D., N.Y.) will lead the hearing and said in a statement this week, “if the Postmaster General were a CEO of another company, he already would have been removed from his position.”

‘I look forward to the work ahead’

DeJoy is set to release a 10-year plan in the coming days and recently told a meeting of the Postal Service’s Board of Governors, “I look forward to the work ahead.”

According to reports, his plan will include a change to first-class mail that could slow down delivery times. And that would come on top of the steep declines that businesses and individuals saw over the recent holiday season. The Washington Post gathered data from recent lawsuits and found that only 38% of non-local first-class mail arrived on time in late December. The comparable figure from 2019 was 92%.

DeJoy says the reform he is undertaking "is not only needed, it is long overdue."

His opponents say the problem is him.

The reported plans would route first-class mail onto trucks instead of the quicker airlines route. "That’s going to be really bad,” said Mitch Goldstone, the CEO of ScanMyPhotos.com, of the impact on his business. His company is heavily reliant on the Post Office, and he says more delays cut into the goodwill he has with his customers. "Our name is being tarnished because people need the deliveries instantly and it’s just not happening,” he said.

A group of 77 lawmakers wrote in a recent letter to Biden that Post Office reforms may be needed, but ”there is a plethora of evidence that Postmaster General DeJoy is not equipped to meet the rigors of these challenges."

In a statement, DeJoy told Yahoo Finance that his plan is “critical to successfully fixing problems that are preventing the Postal Service from meeting the American people’s expectations for reliability, and resulting in billions of dollars of losses every year with no end in sight.” A recent financial report from the USPS projects a net loss of $9.7 billion in 2021 after a loss of $9.2 billion last year.

DeJoy said the plan is still being finalized and details will be released in the coming weeks. The details he's sketched out so far include a commitment to continuing six- and seven-day-a-week delivery service to every address in the country and also a plan to "meets our statutory requirement to be self-sustaining."

A ‘precipitous drop over the holidays’

Goldstone co-founded his company – which requires sending photos back and forth through the mail – in 1990 and has long been a Post Office booster. At one point, he even appeared in a Postal Service ad. More recently he's become an outspoken critic of DeJoy.

He said service got steadily worse over the course of last year and 2020 ended with “a precipitous drop over the holidays.” His company was able to adjust, but a lot of businesses can’t, said Goldstone.

According to a 2019 USPS report, 70% of the smallest businesses – those with fewer than 10 employees – use the Post Office regularly and spend an average $359 a month on shipping. Goldstone’s businesses and others like it have had to find ways around the slowdowns.

The additional cost to Goldstone's business could be in the hundred of thousands of dollars, he said. “I think what I'm going to do is wait to see if he resigns or if he's fired and if that doesn't happen, then I'm going to be sending him a bill for all of our costs that were incurred,” Goldstone said. “I'm just surprised he hasn't just stepped down and disappeared."

At a recent Board of Governors meeting, DeJoy acknowledged the problems during last holiday season. We “disappointed the nation,” he said. “I apologize to those customers who felt the impact of our delays." Also, at that meeting, the board elected Ron Bloom, a Democrat, as the new leader of the board in what could be the first of many changes.

‘There are a number of openings’

Biden does have a means to eventually oust DeJoy but it could take time. The Postmaster General position – in a move designed to shield it from politics – is controlled by the Postal Service Board of Governors.

DeJoy continues to have support on the board with a current panel consisting of two Democrats, four Republicans, and three vacancies.

What Biden has the power to do is fill those vacancies. White House Press Secretary Jen Psaki responded to a recent question about DeJoy’s future at a press briefing by pointing out, “there are a number of openings right now,” which she said would “work their way through a personnel process.”

On Capitol Hill, several lawmakers are also pushing for DeJoy’s ouster. There has been letter after letter after letter after letter calling DeJoy to step down immediately and for Biden to fill the vacancies on the board. Some have even called on Biden to fire the existing board and appoint an entirely new slate.

The hearing set for next Wednesday is in the House Oversight Committee. Both DeJoy and Ron Bloom are set to testify. The overall purpose of the meeting is to preview postal reform that two Democrats on the committee – Gerry Connolly (D., Va.) of Virginia and Carolyn Maloney – are working on.

In addition, all sides expect that members like Connolly – who chairs the Subcommittee on Government Operations, which oversees the Post Office – will question DeJoy about service cuts.

“The Committee will not be delayed or deterred from passing significant reforms to help the long-term financial sustainability of the Postal Service,” Maloney said. “It is up to the president and the Senate to begin filling the vacant seats on the board.”

For his part, Goldstone told Yahoo Finance he remains loyal to the Postal Service, if not it’s current leader.

Much of his current business, he says, comes in digitizing photos that people need for virtual memorials for family members who have died from COVID-19. “At this critical time, businesses can't run away from the Postal Service,” he said. “We trust them and that's really important.”