Just because the United States Treasury is requiring the USPS to provide information about confidential negotiated contracts with its top customers doesn’t mean the USPS is ceding control, the Postal Service indicated in a statement on Thursday.
Congress authorized the USPS to borrow $10 billion from the US Treasury Department as part of the CARES Act (the Coronavirus Aid, Relief, and Economic Security Act).
Because Congress authorized the loans, some believe the Treasury Department is overreaching in its demands spelled out in the terms of the loan agreement it negotiated with the Postal Service.
The USPS said it is providing the Treasury with information regarding its costs, revenues, and overall financial position. “This includes providing Treasury, under strict terms of confidentiality, with those contracts that generate the most revenue for the Postal Service.”
The Washington Post reported on the terms yesterday (note that the newspaper is owned by Jeff Bezos, CEO of Amazon, which has Negotiated Service Agreements with the USPS). The newspaper pointed out that the USPS already hired outside consultants to evaluate the NSAs to make sure they are profitable and fairly priced.
The USPS took issue with the article, stating that, “Providing this information is merely an acknowledgment of the fact that Treasury has been designated by Congress as the lender for the Postal Service, and it therefore has a legitimate interest under certain circumstances in understanding those factors that affect our current and projected financial position.”
It also stated, “Contrary to insinuations made in the Washington Post article, nothing in these terms confers upon Treasury any role whatsoever in Postal Service pricing, management, or strategy.”
Some members of Congress also criticized the terms of the loan yesterday, including the provision limiting how the USPS could use the funds.
In its statement, the USPS didn’t mention the press release issued yesterday by the Congresswomen and men, but it did address their concerns, writing: “Other conditions, such as the requirement that borrowed funds only be used for operating expenses, and not for capital expenses, were expressly mandated by Congress in the language of the CARES Act.”
The following excerpt from the Cares Act bill confirms that the requirement about limits was mandated by Congress:
(b) ADDITIONAL BORROWING AUTHORITY. – Notwithstanding section 2005 of title 39, United States Code, or any other provision of law, if the Postal Service determines that, due to the COVID-19 emergency, the Postal Service will not be able to fund operating expenses without borrowing money –
(1) the Postal Service may borrow money from the Treasury in an amount not to exceed $10,000,000,000
(A) to be used for such operating expenses; and
(B) which may not be used to pay any outstanding debt of the Postal Service; and
(2) the Secretary of the Treasury may lend up to the amount described in paragraph (1) at the request of the Postal Service, upon terms and conditions mutually agreed upon by the Secretary and the Postal Service.
You can find the USPS statement about the terms of its Treasury loan terms on the USPS.com Newsroom.
And you can find more information about the lending terms in yesterday’s EcommerceBytes Newsflash article.
The arrogance of the so called leaders of the USPS actually outdoes the arrogance of Ebay. Hope the treasury cancels the money they deserve a wake up call.
USPS “Yea, so if we want to give Amazon, and China a free ridge we will, nothing you taxpayers can do about it”. “we will take the difference from you whenever you want to mail something”
It seems to me, and this is just my opinion, that a business that is sadly failing financially and wishes to borrow money would by necessity need to disclose financial agreements to the lender. And to have requirements placed upon them as to how the money is to be spent. Borrowers can’t be fussy.
Personally, I don’t believe the agreements with top corporations and foreign entities were made in the best interest of the United States.