Congress to weigh reforms to U.S. Postal Service over finance woes

By David Shepardson

WASHINGTON (Reuters) – A panel of the U.S. House of Representatives will hear testimony on Wednesday from Postmaster General Louis DeJoy and other officials as lawmakers consider significant reforms to tackle the precarious finances of the U.S. Postal Service (USPS).

Delays in paychecks and other mail deliveries by USPS gained attention this summer as a record number of voters mailed in ballots to elect a new president.

DeJoy, a supporter of former President Donald Trump appointed to head the USPS last year, suspended operational changes in August after enormous criticism over postal delays. He plans to release a new 10-year strategic plan soon.

House Oversight and Government Reform chairwoman Carolyn Maloney will make the case for action on the finances of the USPS in the face of shrinking volumes of first-class mail, increased costs of employee compensation and benefits, and higher unfunded liabilities and debt.

“We need to pass meaningful reforms — and hopefully bipartisan reforms — to put the Postal Service on more sustainable financial footing for years to come,” Maloney will say, according to excerpts from her office.

USPS reported net losses of $86.7 billion from 2007 through 2020. One reason is 2006 legislation that it pre-fund more than $120 billion in retiree health care and pension liabilities, a requirement labor unions have called an unfair burden not shared by other businesses.

Maloney has circulated draft legislation on some USPS financial issues, such as eliminating a requirement to pre-fund retiree health benefits.

It would also require postal employees to enroll in government-retiree health plan Medicare, for a saving of roughly $10 billion over ten years.

Mark Dimondstein, president of the American Postal Workers Union, will urge Congress to include an additional $15 billion “to help stabilize the Postal Service during this crisis” in a COVID-19 relief package.

His testimony, seen by Reuters, calls for another USPS “modernization grant” of $25 billion to make “long overdue” investments in a clean postal fleet, modernizing postal facilities and providing electric vehicle charging stations for local post offices.

Also testifying is Joel Quadracci, chief executive of printing company Quad/Graphics.

DeJoy will testify alongside Ron Bloom, a former Obama administration official elected this month as the new chairman of the U.S. Postal Board of Governors.

In December, Congress converted into a grant a $10 billion U.S. Treasury loan that lawmakers gave to USPS in March.

(Reporting by David Shepardson; Editing by Clarence Fernandez)

Analysis: Urban states come out ahead, rural states get less in Biden’s COVID-19 relief bill

By Andy Sullivan and Jason Lange

WASHINGTON (Reuters) – The $1.9 trillion COVID-19 relief package now making its way through the U.S. Congress would provide $350 billion to help pandemic-hit state and local governments balance their budgets, more than twice the amount lawmakers approved last year.

But not every state comes out ahead: urban, Democratic-led states like Connecticut, New York and Massachusetts that took drastic steps to stop the coronavirus’ spread would get about three times as much money per person as they did in the package passed at the beginning of the health crisis in March.

Rural, Republican-led states including Wyoming, North Dakota and South Dakota that did less would see less cash.

That’s because Congress is giving greater weight to poverty and unemployment this time as it considers how to distribute money to keep police, firefighters and other public employees on the job during a pandemic that has killed more than 500,000 Americans and thrown millions out of work.

It also reflects the fact that Democrats who control both chambers of Congress drafted the package for their fellow Democrat President Joe Biden without Republican input.

Under the new bill, named the American Rescue Plan, 61% of the aid would end up in states that voted for Biden in November, up from 56% in the bipartisan CARES Act passed last March.

Reuters examined House Oversight Committee projections on how much direct fiscal aid each state would receive in the bill, which is set for a vote in the House of Representatives this week before moving to the Senate.

It is expected to pass, even if no Republicans vote for it.

The CARES Act distributed $140 billion to state and local governments based on population, delivering a minimum of $1.25 billion to each state. That gave the largest per-capita benefits to the states with the smallest populations, including Wyoming and Vermont. Another $3 billion was set aside for Washington, D.C., and U.S. territories.

This time around, Democrats have lowered the per-state minimum to $500 million. The remaining $300 billion would be allocated based on unemployment and poverty levels as well as population. Tribal governments and territories would get $24.5 billion. Washington, D.C., would be treated like a state.

Advocates say the new formula ensures the money goes where it is needed, as COVID-19’s toll has been uneven across the country. Unemployment in December topped 9% in tourism-dependent Nevada and Hawaii, triple the 3% in Nebraska and South Dakota.

“This is a more targeted approach,” said Michael Leachman, a budget expert at the left-leaning Center on Budget and Policy Priorities, who supports additional state and local aid.

Republicans say the bill short-changes states that have imposed fewer coronavirus-related restrictions.

“The real reason for this bill is to send billions to bail out blue-state governors and reward their harmful lockdown policies,” Representative Jason Smith of Missouri said at a House Budget Committee hearing on Monday.

The new bill would direct roughly $800 per person to Republican-led Utah and Alabama, which had some of the least restrictive COVID-19 responses, according to Oxford University researchers.

It would send roughly $1,200 per person to Democratic-led Massachusetts and New York, among the most restrictive.

Democrats argue that the money should be targeted towards areas that have suffered the most.

“Since when is unemployment not a legitimate indicator of economic distress?” Representative David Price, a Democrat from North Carolina, said at the same hearing.


State and local aid has proven to be one of the most divisive aspects of the multi-trillion dollar effort Washington has mounted in the past year to fight the virus and keep the world’s largest economy afloat.

Republicans and Democrats both broadly supported small-business loans and direct payments to families.

But Republicans have balked at providing more aid to state and local governments. State and local aid was excluded from a bipartisan $900 billion bill that passed in December.

The National Association of State Budget Officers calculated state revenues would drop 10.8% in the current fiscal year when compared with pre-pandemic estimates, affecting Republican-led and Democratic-led states alike.

Some analysts say the Democrats’ proposal, which adds up to about $500 billion when spending for public schools, transit and other aid is included, provides states with more than they need, however.

“People dramatically overestimated how bad the state and local finances would be,” Stan Veuger, an economist at the center-right American Enterprise Institute.

Bipartisan groups like the National Governors Association have argued that further aid is needed to help states deliver health care and education and avoid further layoffs that could prolong the recovery, though they have not endorsed specific proposals.

Though the new bill would steer more money towards large states, smaller states still fare well. Vermont, Wyoming, Alaska and North Dakota, each with fewer than 1 million residents, are still among the top 10 recipients on a per capita basis.

(Reporting by Jason Lange and Andy Sullivan; Editing by Scott Malone and Sonya Hepinstall)

U.S. Senate Democrats prepare to push through Biden’s $1.9 trillion COVID-19 package

WASHINGTON (Reuters) – Democrats in the U.S. Senate were poised on Thursday to take a first step toward President Joe Biden’s $1.9 trillion COVID-19 relief proposal, in a marathon “vote-a-rama” session aimed at overriding Republican opposition to the package.

Senate Democrats need to pass a budget resolution to unlock a legislative tool called reconciliation, which would allow them to approve Biden’s proposal in the narrowly divided chamber with a simple majority. The House of Representatives approved the budget measure on Wednesday.

Most legislation must get at least 60 votes in the 100-seat Senate to pass. But the chamber is divided 50-50 and Republicans oppose the Democratic president’s proposal. Reconciliation would allow the Senate’s 48 Democrats and two independents to approve the relief package with a tie-breaking vote from Vice President Kamala Harris.

Senate Democrats and the Biden administration have left the door open to Republican participation but have said they want comprehensive legislation to move quickly to address a pandemic that has killed over 450,000 Americans and left millions more jobless.

“Seeing long lines of people waiting to get food around the country is something we should never see in the United States,” U.S. Treasury Secretary Janet Yellen said on ABC News’ “Good Morning America” program.

“This is really an urgent need. And we need to act big. We need to make sure that we provide a bridge so that people aren’t scarred indefinitely by this crisis,” she said.

But the Democrats’ march to add more assistance to last year’s $4 trillion in coronavirus relief could be complicated by the impeachment trial of Republican former President Donald Trump, which is set to begin next week and could distract from the legislation.

Once adopted, the budget resolution would provide spending instructions to House and Senate committees charged with crafting COVID-19 relief legislation.

The reconciliation measure is not a piece of legislation and does not require the president’s signature to take effect. If the Senate passes it without amendments, it will take effect immediately. If any amendments pass, the package would return to the House, which would need to vote on it again.

In show of bipartisanship, Senate Majority Leader Chuck Schumer, a Democrat, this week pledged that consideration of the budget resolution would be open to amendments from both parties in a process known informally as a “vote-a-rama,” which could run to late Thursday night or early Friday.

“We invite participation from both sides of the aisle,” Schumer on Thursday. “But I urge members not to lose sight of what this legislation will mean for the American people.”

Republicans expect to offer up to 20 amendments on issues ranging from energy and federal land use to executive orders.

(Reporting by David Morgan and Susan Heavey; Editing by Scott Malone and Jonathan Oatis)

Democrats ready first steps toward $1.9 trillion U.S. COVID-19 relief bill

By David Morgan and Susan Cornwell

WASHINGTON (Reuters) -Democrats in Congress prepared on Tuesday to take the first steps toward fast-track passage of U.S. President Joe Biden’s $1.9 trillion COVID-19 relief package – and without Republican support if necessary.

A fiscal 2021 budget measure, with coronavirus aid spending instructions, was headed for preliminary votes that would help unlock a legislative tool needed for Democrats to enact Biden’s package swiftly in the face of Republican opposition.

Republicans have pushed back on Biden’s $1.9 trillion price tag, which follows $4 trillion in COVID-19 aid last year.

On Monday, Biden met with 10 Senate Republicans to discuss their own scaled-back $618 billion plan. He told lawmakers it did not go far enough to address a pandemic that has killed nearly 444,000 people in the United States.

Jared Bernstein, a member of the White House Council of Economic Advisers, said on Tuesday that the Republican proposal fell far short in a number of areas, including funding to reopen schools. Republicans called for spending $20 billion on schools, compared with Biden’s proposal for $170 billion.

“We think that’s what it’s going to take to reach people,” Bernstein told CNN.

Biden’s package faces a potential Republican roadblock in the 100-member Senate, which is divided 50-50 but requires a 60-vote threshold to pass most legislation.

The budget resolution, if approved by the House of Representatives and Senate, would activate a legislative tool called reconciliation, allowing for Senate passage with 51 votes that would include 48 Democrats, two independents who caucus with them, and Vice President Kamala Harris.

It would mark the first time congressional Democrats had used the maneuver to flex their legislative muscle since winning razor-thin control of the Senate in two runoff elections last month in Georgia. They already control the House.

The House was expected to take a procedural vote on the budget resolution during votes tentatively scheduled to begin at 6:30 p.m. EST (2330 GMT). Schumer also announced a Tuesday afternoon vote in the Senate on opening debate on the budget resolution.

Schumer insisted he wanted the COVID-19 aid effort to be bipartisan, even though the budget process being used provides the legislative means for his fellow Democrats to move ahead without Republicans if need be.

“We’re talking about using the budget process to speed the production and distribution of a vaccine that everyone champions and everyone knows is the key to ending the crisis,” he said.

(Reporting by David Morgan and Doina Chiacu; additional reporting by Susan Heavey and Susan Cornwell; Editing by Chizu Nomiyama and Howard Goller)

Deal on fresh U.S. coronavirus relief eluding Congress

By David Morgan and Richard Cowan

WASHINGTON (Reuters) – Republicans and Democrats in Congress remained unable to reach agreement on fresh relief for a pandemic-hit U.S. economy on Wednesday, with top Republicans supporting what the Senate’s top Democrats dismissed as an “inadequate, partisan proposal.”

Treasury Secretary Steven Mnuchin said President Donald Trump supported a proposal put forth by Republican Majority Leader Mitch McConnell after McConnell on Tuesday rejected a $908 billion bipartisan package.

McConnell’s outline is very close to the legislation that the Senate leader has been touting for months and was rejected by Democrats, according to one Senate Republican source. The plan includes $332.7 billion in new loans or grants to small businesses, according to a document provided to Reuters.

Adding to the pressure, the two parties face a Dec. 11 deadline to pass a $1.4 trillion budget or risk a shutdown of the government as the COVID-19 crisis worsens across the United States.

House Majority Leader Steny Hoyer told reporters on Wednesday he hoped the House and Senate leaders could agree on a coronavirus aid bill by the end of this weekend that would be folded into the budget package.

“I am hopeful that in the next few days that we will be able to come to an agreement on a bill that responds to the major crisis, at least in the short term,” Hoyer said.

(Reporting by David Morgan and Richard Cowan; Editing by Scott Malone, Sandra Maler, Alistair Bell and Jonathan Oatis)