Congress allowed the USPS to borrow $10 billion from the US Treasury Department included in the CARES Act (the Coronavirus Aid, Relief, and Economic Security Act).
However, in negotiating the conditions, the Treasury Department attached some Substantial strings, such as the next:
“Subject to confidentiality protections, USPS shall provide to Treasury copies of USPS’s top 10 market dominant Negotiated Service Agreements (NSAs) and top 10 competitive products NSAs.”
Another supply: that the USPS would need to disclose to the Treasury any new or sterile NSAs that could constitute USPS’s top 10 market dominant NSAs and top 10 competitive merchandise NSAs.
Firms who enter into these arrangements anticipate them to be kept confidential; it isn’t apparent why the Treasury Department needs the info.
Louis DeJoy, that recently took more than Megan Brennan as Postmaster General, had made no mention of the particulars of terms from the press launch the USPS published on Wednesday when he stated:
“Access to an additional $10 billion in borrowing authority will delay the approaching liquidity crisis,” DeJoy said. “The Postal Service, however, remains on an unsustainable path and we will continue to focus on improving operational efficiency and pursuing other reforms in order to put the Postal Service on a trajectory for long-term financial stability.”
The Washington Post reported about the conditions (notice that the paper is owned by Jeff Bezos, CEO of Amazon, which has NSAs using the USPS). It pointed out that the USPS hired external consultants to appraise the NSAs to be certain that they’re rewarding and reasonably priced.
The queries a few are asking is why the Treasury needs the advice, because Congress already approved the loans, and also what the Treasury will do with all the info.
Four Congresswomen and guys took issue with all the conditions involving limitations on how the USPS may utilize the capital (the expression sheet says beneath Utilization of Funding: “Operating expenses; proceeds may not be used for debt service or capital expenses.” They published a press release on Wednesday that said in part:
“Secretary Mnuchin along with the direction of this U.S. Postal Service seem to be exploiting this public health outbreak to maintain the Postal Service to ridiculous loan provisions before consulting Congress. The term sheet we’ve been supplied would inappropriately fit the Treasury to the inner operations of these Postal Service using onerous loan conditions.
“These terms would severely limit the Postal Service’s access to capital and could accelerate the demise of the Postal Service that all Americans, especially seniors, small businesses, veterans and those living in rural communities, rely upon every day, especially during the pandemic.”
Details of the conditions can be found the House Oversight Committee site.