President Donald Trump is misrepresenting the U.S. Postal Service’s financial problems as his postmaster general defends cuts that have slowed mail delivery in advance of the November election.
Speaking before the start of the Democratic National Convention, Trump raged anew about the perils of mail-in voting and argued that the post office needed an overhaul, blaming Amazon deliveries for its operating in the red. Package deliveries actually have been the bright spot for the post office, with double-digit increases in revenue.
Trump also gave his trade deal with China false credit for generating the purchases of U.S. goods that Beijing agreed to make. Chinese imports of U.S. products are actually running at less than half of what Trump negotiated, and it’s even worse for American farmers who sell to China.
A look at some of his claims Monday:
TRUMP: “One of the things the Post Office loses so much money on is the delivering packages for Amazon and these others. Every time they deliver a package, they probably lose three or four dollars. That’s not good.” — remarks Monday to reporters.
THE FACTS: That’s false.
While the U.S. Postal Service has lost money for 13 years, package delivery is not the reason.
Boosted by e-commerce, the Postal Service has enjoyed double-digit increases in revenue from delivering packages, but that hasn’t been enough to offset pension and health care costs as well as declines in first-class letters and marketing mail. Together, letters and marketing mail in recent years have comprised up to two-thirds of postal revenue.
In arguing that the Postal Service is losing money on delivering packages for Amazon, Trump appears to be citing some Wall Street analyses that argue the Postal Service’s formula for calculating its costs is outdated. A 2017 analysis by Citigroup did conclude that the service was charging below market rates as a whole on parcels. Still, federal regulators have reviewed the Amazon contract with the Postal Service each year and found it profitable.
To become financially stable, the Postal Service has urged Congress for years to give it relief from the mandate to prefund retiree health benefits. Legislation in 2006 required the Postal Service to fund 75 years’ worth of retiree health benefits, at an estimated cost of $5 billion per year, something that neither the government nor private companies are required to do.
In the most recent quarter, for instance, package delivery rose 53% at the Postal Service as homebound people during the pandemic shifted online for their shopping. But the gain in deliveries was offset by the continued declines in first-class mail as well as costs for personal protective equipment and to replace workers who got sick during the pandemic.
The biggest factor was the prepayment of retiree health benefits, which Congress imposed and only Congress can take away.
As a quasi-government agency, the Postal Service also is required under law to provide mail delivery to millions of U.S. residences at affordable and uniform rates, an increasingly labor-intensive task given the nation’s growing population. It does not use taxpayer money for its operations and supports operations with the sales of stamps and other mail products.
TRUMP: “We want to make sure that the Post Office runs properly and it hasn’t run properly for many years, for probably 50 years. It’s run very badly. So we want to make sure that the Post Office runs properly and doesn’t lose billions of dollars.” — remarks Monday to reporters.
THE FACTS: There’s no evidence of broad mismanagement at the Postal Service that dates back 50 years, nor did Trump offer any evidence.
The Postal Service started losing “billions,” as Trump put it, after the 2006 law mandating health prefunding took effect. Those billion-dollar payments, which coincided with the 2007-2008 Great Recession and a wider shift toward online bill payments, pushed the Postal Service into the red. Excluding those health payments, it has finished each year with revenue surpluses for most of the past decade.
TRUMP, on unrest in Minnesota after George Floyd died in the custody of Minneapolis police: “When I sent in the National Guard, that’s when it all stopped.” — speech in Mankato, Minnesota.
THE FACTS: No, Gov. Tim Walz, a Democrat, deployed the Minnesota National Guard, not Trump. The president didn’t send forces to the streets in Minnesota. He repeatedly claims that he did.
In the speech, Trump went on to say he urged Minnesota officials to deploy the Guard and “they should have done it a lot sooner,” thereby acknowledging, if indirectly, that the order wasn’t his. But Walz said he mobilized the Guard at the request of city officials, not because Trump wanted him to.
TRUMP, on China’s adherence to the trade deal his administration negotiated with Beijing: “They are living – they’re more than living … up to it. … Because they know I’m very angry at them.” — “Fox & Friends” interview Monday.
THE FACTS: That’s not true. China is falling well short of its commitments under the trade deal.
The Peterson Institute for International Economics, which has been tracking China’s purchases, found this month that U.S. exports of goods to China should have totaled $71.3 billion from January through June to be on track to reach this year’s target under the Phase 1 deal. Instead, they topped out at $33.1 billion, only 46% of what they should be.
The shortfall in promised Chinese purchases of U.S. farm products is even bigger. Those purchases totaled $6.5 billion, only 39% of purchases that should have reached $16.7 billion through June.
The gap is perhaps not surprising, given that world trade has been badly disrupted by the coronavirus pandemic. But Trump did not negotiate provisions giving China leeway in any downturn. It’s conceivable, if unlikely, that Chinese purchases will pick it up in the second half of the year enough to make up for the shortfall.
But in no sense is China more than living up to the deal now.
Associated Press writer Matthew Daly contributed to this report.
EDITOR’S NOTE — A look at the veracity of claims by political figures.
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