Four Groups that Hold the Fate of the USPS in Their Hands (and the One That Matters Most)

By Jory Haslett, Chair, Public Affairs Committee for the Greeting Card Association

As we kick off the effort to push regulatory modernization legislation through the process, it is useful to take a step back to look at the key groups that, for good or bad, control the USPS and its approach to its enormous public service responsibility. It may also be helpful to be aware of how the GCA works to engage with each of them. There are four key groups that direct and control the USPS: Postal Service Management, The USPS Board of Governors, the Congressional Oversight Committees in the House and Senate and the Postal Regulatory Commission (PRC). With four organized entities to direct and control an agency, one would think positive outcomes would be almost guaranteed, but as we will see, each has critical flaws that the current system is unable to resolve.

USPS Management

Postal Service management is the first and most direct body that controls USPS operations. Prior to 1970, the Postmaster General was a presidential appointment going all the way back to Benjamin Franklin, the architect of the nation’s first postal system.  After him, the Postmaster General position became a political patronage position that did not always produce he ideal candidate and suffered from the vagaries of party politics, but the appointment did require approval from the Senate. After the 1970 Postal Reorganization Act, the Postmaster General was selected and served at the pleasure of the USPS Board of Governors.  This arrangement produced some good and some not-so-good individuals. Throughout that time, GCA worked to establish as positive a relationship as possible with the Postmaster General and key members of the senior management team. These relationships produced some significant benefits for the greeting card industry including the introduction of the Forever Stamp in 2007, the Butterfly Stamp in 2010 and more recently active cooperation on Thinking of You Week and holiday marketing beginning in 2015 and 2018 that continues today. 

These dynamics have been challenged under the tenure of the current Postmaster General, Louis DeJoy. While GCA has attempted to develop a relationship and had a letter of welcome and invitation to meet on his desk the day he started, DeJoy has approached the mailing community with a high degree of skepticism that has evolved into disdain.  He has been convinced that mailers were not constructive partners to the USPS and blamed them for the price cap in the 2006 Postal Enhancement and Accountability Act that reined in USPS pricing authority. His Delivering for America Plan laid out a path of excessive price increases and service reductions as well as a planned loss of traditional mail volume of 40% over ten years that caused great concern. GCA was and is convinced that such losses are not the best outcome that could be achieved if mailers and USPS management work together but, sadly, the volume losses will likely be even worse if the plan is allowed to continue.   

Nevertheless, GCA has continued to seek positive engagement with DeJoy’s USPS management team. As you will see from the USPS organization chart, we are in weekly contact with Steve Monteith, the USPS Chief Customer and Marketing Officer and Vice President who reports directly to his team as well as Sharon Owens who is the Vice President for Pricing and Costing.  GCA’s ad hoc marketing committee has recently held a positive meeting with Sheila Holman, the Vice President for Marketing under Monteith that we hope will lead to ongoing dialogue that could lead to a new program of jointly marketing stamps and member cards.  At the end of the day, however, the USPS remains a monopoly and DeJoy’s vision that de-emphasizes mail in favor of packages remains a huge challenge.

The USPS Board of Governors

The second body that is responsible for effective management of the USPS is the Board of Governors. This body is comprised of nine individuals who are appointed by the President and approved by the Senate. The balance of the Board changes based on the party in control of the presidency with five of the nine members belonging to it during his term. In theory the Board should hold USPS management accountable and is responsible for hiring and firing the Postmaster General. In practice, the Board has always been heavily influenced and captive to USPS management who control the information it receives and benefits from a lack of full-time service by Board members whose compensation is low (@$30,000.00). Another challenge is that political patronage considerations and candidates often dictate Board appointments lack the detailed knowledge needed to see behind the information USPS gives them.  Currently, there are two vacancies and one term soon to expire and three nominations pending. While Bill Zollars, a former USPS Board member has been put forward for a Republican seat, the two other candidates are Marty Walsh, a former Secretary of Labor and Executive Director of the National Hockey League Player’s Association and Val Demings, a former Member of Congress who served as a police chief in Florida. While both have significant individual accomplishments in their fields of expertise, neither seems a logical choice to help direct a huge logistics enterprise that is currently on a path to bankruptcy. 

Under normal circumstances a Board would have a fiduciary responsibility to question management when plans do not meet expectations. In the case of the Delivering for America plan the USPS lost $6.5 billion in 2023 in what was supposed to be the first break-even year under the 10-year period and is forecast to lose as much as $8 billion in 2024 with no improvement in sight, yet the Board has offered no resistance to the plan approach even as it moved from a Republican majority appointed by President Trump to a Democratic majority under President Biden.  Unfortunately, because of the control exerted by USPS management, it is difficult for GCA or any mailer to engage directly with the Board outside of informal and infrequent contact with members. The USPS has even limited the public engagement of the Board, moving from a policy of brief comments from attendees at open Board meetings four times a year to only once a year.

Congressional Oversight

A second means of control over the USPS monopoly comes from the House and Senate oversight committees who, in theory, hold USPS management and its board accountable through hearings and inquiries and in the case of the Senate, control the approval process for Board nominations. In practice, the increasing partisanship in Congress and the dysfunction of the process has impacted the effectiveness of congressional oversight. In the first thirty years following the 1970 USPS Reorganization Act, there were dedicated postal subcommittees and regular day-long hearings where multiple stakeholder groups and postal unions had the opportunity to share perspectives and concerns. This has dwindled to the point that the Delivering for America plan did not receive a single hearing until two years after its implementation and then in a hearing where Postmaster General DeJoy was the sole witness.

Nevertheless, any legislative changes must go through the oversight committees and GCA has continually engaged with the leadership and individual members of committees and have worked extensively with individual members to develop legislation to improve the regulatory process including Reps. Jake LaTurner (R-KS) and Gerry Connolly (D-VA).  The USPS has benefitted from the distractions in Congress and the sense that the 2022 Postal Service Reform Law had solved the USPS problem for the foreseeable future, but mounting losses and public anger at poor service are bringing more attention to the USPS.  It remains to be seen who will lead the committees next year based on the outcome of the elections, but GCA will be prepared to renew the push for regulatory modernization regardless of the outcome.

Postal Regulatory Commission (PRC)

This leaves is with the Postal Regulatory Commission (PRC), a body that in theory should be the first and last line of defense for mailers against the excesses of the USPS monopoly. The GCA has been a regular party in PRC proceedings arguing for the interests of the individual citizen-mailer consumer who are our members retail customers. More than half of all cards sold can only be delivered by the USPS and those mailers have no other advocate other than the GCA.

While GCA has had many successes in regulatory proceedings thanks to our counsel, David Stover, who is a former General Counsel for the Commission and expert data and analytics from retained economists, the PRC has gone through a lengthy period of self-deregulation beginning in 2007 when it abolished the Office of Consumer Advocate with whom GCA regularly coordinated and replaced it with an ineffective rotating “Public Representative.” The Commission appoints a different member of the PRC staff to this role in each proceeding resulting in no consistency in approach and since these representatives are staff at the commission, they lack independence to take positions contrary to the commissioners. It is notable that in most of the key cases, the “Public Representative” has taken positions contrary to GCA’s including the nickel price increase in 2018 which was the largest stamp hike in history and the USPS’s aggressive and unprecedented twice-a-year increases as the Delivering for America plan was implemented.

In the most recent increase in July of this year, the Commission signaled that its laissez-faire approach may not have been appropriate noting that the increase that again raised the Forever Stamp by a nickel (once again supported by the “Public Representative”) was “not prudent… or in the best interests of all stakeholders” but lamented that it lacked the legal basis to oppose it. That in a nutshell sums up the problem we face and the reason that the GCA has led in developing legislation to make sure that the PRC has a clear mandate to limit excessive volume-killing rate hikes and instead hold the USPS accountable for efficiency and cost control that have never been effectively accomplished and are the driver for the USPS continued losses. 

Beyond the formal engagement with the PRC through participation in all relevant proceedings, GCA has also engaged with the commission. We have participated in two meetings this year with the full commission who invited us to brief them on work by NDP, GCA’s economics firm, highlighting flaws in USPS demand modeling and will host the newest commissioner, Tom Day, at the Workshop and Retreat. 

2025 will be a pivotal year for postal policy and effective engagement with Congress and the PRC will be critical to change the policies that have allowed the USPS to run rampant. As the USPS financial situation spirals further out of control, GCA’s need to support responsible, evidence-based changes will likely lead to tension with Postmaster General DeJoy, however, we will continue to engage with senior leadership and upper management at USPS headquarters to offer cooperation and solutions that lead to more greeting cards in the mail.  Hopefully, we can return to a point where the value of mail and particularly the “red carpet” moment greeting cards provide are uniformly recognized and valued by all the decision-makers for the USPS.