2020 Year-End COVID Relief Legislation: USPS Financial Assistance

By Lisbeth Lyons Black

In the waning days of 2020 (Sunday, December 27, to be exact), President Trump signed HR 133, the Consolidated Appropriations Act, 2021, a combination COVID-19 stimulus/relief and omnibus government funding bill passed by the House and Senate on December 21, 2020. The Act provides approximately $900 billion to bolster the U.S. economy amid the continued spread of COVID-19. A key provision of the Act is inclusion of pandemic-related financial assistance to the United States Postal Service (USPS) to keep this critical supply chain partner delivering print and packages.

As background, the massive CARES Act that passed in April 2020 as an initial legislative response to COVID-19 provided direct cash assistance to sectors (like airlines) that were bearing an extreme brunt due to the pandemic. USPS was identified as one such sector; however, the Trump Administration refused to provide similar direct cash support and instead provided additional borrowing authority for up to $10 million dollars to USPS under Section 6001 of the CARES Act. PRINTING United Alliance and mailing industry allies decried this outcome as saddling USPS with additional debt went contrary to the intent of supporting industry sectors to survive the pandemic crisis.

PRINTING United Alliance and its partners in the Coalition for a 21st Century Postal Service advocated successfully that Congress revise the original legislation to add one line that would forgive the loan authorized in the CARES Act, should it be needed, pursuant to the original terms. These terms provided guardrails for use of the $10 million so that it could only be used to fund operating expenses or costs related to COVID-19.

It’s worth noting that since the passage of the CARES Act, USPS has not executed its borrowing authority to date. Instead, USPS has accessed short-term notes through other borrowing authorities, withheld Employer Social Security, and experienced substantial revenue increases in its package business, thus avoiding the necessity to access the Treasury loan offer. However, USPS has been plagued with front-line workforce health absences due to COVID-19, and the ongoing pandemic could lead to the agency to require accessing the available relief. The fact that it is now a forgivable loan provides a measure of certainty to the agency’s financials and one less reason to request a postal rate increase. And when it comes to postal policy: certainty and affordability are the two critical components sought by the industry.

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