Published: Fri, April 13, 2018
Business | By Kate Woods

Trump orders review of Postal Service amid Amazon accusations

Trump orders review of Postal Service amid Amazon accusations

The president signed an executive order Thursday night that assigns a task force to review the postal service's operation and finances.

President Trump has repeatedly accused Amazon of not paying its fair share for postage. The order also directs the task force to issue a report outlining proposed changes within 120 days.

But Amazon and its CEO, Jeff Bezos, have been frequent targets of Trump's attacks, with the president widely seen as targeting the company because Bezos owns The Washington Post, which has reported critically on the president. Trump is right that the USPS has had a recent run in the red ink, but this is largely attributed to a 2006 law mandating that the Postal Service pre-fund retiree health benefits.

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The executive order comes as some perceive Amazon as a big benefactor for the Postal Service, bringing it more business at a time when letter deliveries are slumping.

Aides have repeatedly pointed out to Trump that the online retailer is not to blame for the Postal Service's financial woes, but Trump has not assented. It said the Postal Service had lost $65 billion since the 2007-2009 recession. "Singling out favorite Trump villains like Amazon is a distraction from our bipartisan effort".

In response to an op-ed that appeared in the Wall Street Journal previous year, USPS Chief Financial Officer Joseph Corbett wrote that it is "inaccurate" to say that the Postal Service delivers packages "below cost". However, federal law requires USPS to charge enough to cover the cost of delivering packages for companies like Amazon.

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The truth is that reported USPS losses are nearly totally due to the onerous pre-funding requirement that was imposed on the USPS by Congress in 2006 thru the Postal Accountability and Enhancement Act (PAEA).

Postal Service experts and even Mr Trump's own advisers have privately urged him to back off the accusations, noting that the huge number of packages shipped by Amazon is actually helping to keep the Postal Service financial solvent. "Our regulator, the Postal Regulatory Commission (PRC), looks carefully at this question every year and has determined that they do", Corbett wrote. "It is that infrastructure that enables us to fulfill our universal service obligation to deliver to each and every address in the United States at an affordable rate". The fact is that the USPS receives no taxpayer dollars for operating expenses.

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