Trump personally pushed U.S. Postal Service head to double rates on Amazon, other firms
WASHINGTON – U.S. President Donald Trump has personally pushed U.S. Postmaster General Megan Brennan to double the rate the Postal Service charges Amazon.com and other firms to ship packages, according to three people familiar with their conversations, a dramatic move that probably would cost these companies billions of dollars.
Brennan has so far resisted Trump’s demand, explaining in multiple conversations occurring this year and last that these arrangements are bound by contracts and must be reviewed by a regulatory commission, the three people said. She has told the president that the Amazon relationship is beneficial for the Postal Service and gave him a group of slides that showed the variety of companies, in addition to Amazon, that also partner for deliveries.
Despite these presentations, Trump has continued to level criticism at Amazon. And last month, his critiques culminated in the signing of an executive order mandating a government review of the financially strapped Postal Service that could lead to major changes in the way it charges Amazon and others for package delivery.
Few U.S. companies have drawn Trump’s ire as much as Amazon, which has rapidly grown to be the second-largest U.S. company in terms of market capitalization. For more than three years, Trump has fumed publicly and privately about the giant commerce and services company and its founder Jeff Bezos, who is also the owner of The Washington Post.
Trump alleges Amazon is being subsidized by the Postal Service, and he has also accused The Post as being Amazon’s “chief lobbyist” as well as a tax shelter — both false charges. He says Amazon uses these advantages to push bricks-and-mortar companies out of business. Some administration officials say several of Trump’s attacks aimed at Amazon have come in response to articles in The Post that he didn’t like.
Brennan and Trump have met at the White House about the matter several times, beginning in 2017, and most recently four months ago, the three people said. The meetings have never appeared on Trump’s public schedule. Brennan has spent her career at the Postal Service, starting 32 years ago as a letter carrier. In 2014, the Postal Service’s Board of Governors voted to appoint her as postmaster general.
Clouding the matter even further, Trump’s aides have also disagreed internally about whether Amazon is paying enough to the Postal Service, with some believing the giant commerce company should be paying more, while others believe that if it weren’t for Amazon, the Postal Service might be out of business, according to the three people.
Trump has met with at least three groups of senior advisers to discuss Amazon’s business practices, probing issues such as whether they pay the appropriate amount of taxes or underpay the Postal Service, according to the three people.
These groups include Treasury Secretary Steven Mnuchin, then-National Economic Council Director Gary Cohn and Domestic Policy Council Director Andrew Bremberg. Bremberg has served as a key liaison with Brennan.
One of Amazon’s biggest defenders within the White House was Cohn, who had told Trump that the Postal Service actually made money on the payments Amazon made for package delivery. Cohn announced his departure from the White House in March.
The White House, the Postal Service and Amazon — as well as Bezos, via an Amazon spokesman — declined to comment for this report.
While Trump has leveled a range of criticisms at Amazon, his efforts to increase the company’s shipping and delivery costs stand as the only known official action he’s taken to go after the company.
The company, meanwhile, has tread carefully around Trump. It has dramatically expanded its spending on lobbying in the past few years, according to data from the Center for Responsive Politics, but Amazon officials have not been directly engaged with White House officials about the review, according to the three people familiar with the White House deliberations as well as others familiar with Amazon’s approach.
The company has, however, hosted more than a dozen lawmakers and governors at numerous Amazon facilities across the country to impress upon them the company’s economic footprint and job creation potential.
On March 7, when the company announced that it would be building a new fulfillment centre in Missouri and hiring 1,500 employees, it alerted the state’s two U.S. senators on Twitter, Democrat Claire McCaskill and Republican Roy Blunt.
Trump has berated Amazon and The Post on social media, briefly driving down Amazon’s stock price. And he has said publicly that he doesn’t believe the information he has been presented by some of his advisers and Brennan herself regarding the Postal Service’s contract with Amazon.
“I am right about Amazon costing the United States Post Office massive amounts of money for being their Delivery Boy,” he wrote on April 3. “Amazon should pay these costs (plus) and not have them bourn by the American Taxpayer. Many billions of dollars. P.O. leaders don’t have a clue (or do they?)!”
Details of Amazon’s contract with the Postal Service are secret, making it difficult for financial experts to assess claims about the relationship. Amazon has said that publicly releasing the contract, which contains detailed information on the company’s delivery systems, would give competitors an unfair advantage.
Amazon primarily uses the Postal Service for the “last mile” of its deliveries. It brings the packages to the post office closest to the final destination, and then the Postal Service takes it from there. The Postal Service says other companies also have “last-mile” agreements with it but declines to say whom.
Amazon is the leading player in e-commerce but competes with other retail giants such as Walmart, Macy’s and Costco to offer fast and inexpensive delivery of products. The Postal Service competes with UPS, FedEx and others for delivery.
Amazon said it spent US$21.7 billion on shipping costs in 2017, a figure that includes sorting, delivery center and transportation costs. Roughly 40 per cent of its packages are delivered by the Postal Service, according to some analysts, a figure neither Amazon nor the Postal Service have confirmed. It is not known how much Amazon pays the Postal Service each year and what percentage of its items are shipped via the Postal Service.
The Postal Service, meanwhile, reported shipping and package income of US$19.5 billion last year, an 11.8 per cent increase from one year before. This increase wasn’t enough to stop the Postal Service from losing money for the eleventh straight year. That’s largely because of the continued decline in first-class mail, and expensive health benefit costs that the Postal Service must set aside for future retirees, according to data released by the agency.
Delivering packages has been a financial boon to the Postal Service in an otherwise tumultuous time, but experts say it is an open question whether Amazon’s arrangement fully compensates the Postal Service for its range of expenses. While the Postal Service is legally prohibited from charging a shipper less than it costs to deliver a package, the Postal Service is not required to include in its costs things such as retiree benefits.
David Vernon, an analyst at Bernstein Research, estimates that Amazon pays the Postal Service roughly US$2 per package for each delivery, about half of what Amazon would pay United Parcel Service or FedEx. He based this estimate on broader data released by the Postal Service.
The Postal Service has tried to rapidly adjust its business model to take on more package delivery, but he said it would be better suited if it delivered fewer packages at a higher rate.
“In my business judgment, there’s too much ‘package’ in the postal network,” he said in an interview. “If you doubled the price, you would have fewer of them, but you would make money off what is left.”
Still, Postal Service officials, both in meetings with Trump and publicly, have insisted that they are making money off their arrangement with Amazon.
In January, Postal Service spokesman David Partenheimer wrote an op-ed in the Hill newspaper pushing back against calls for it to raise package rates.
“Some of our competitors in the package delivery space would dearly love for the Postal Service to aggressively raise our rates higher than the marketplace can bear – so they could either charge more themselves or siphon away postal customers,” he wrote.
“The Postal Service is a self-funding public institution that generates its revenue from the sale of postal products and service, we compete for every customer across all of our product categories, and we exist for the benefit of American businesses and consumers.”
Because the Postal Service has lost money for 11 straight years, it has had to repeatedly borrow funds from the Treasury Department’s Federal Financing Bank, totalling US$15 billion. Its reliance on taxpayer funds has allowed Mnuchin — one of Trump’s closest advisers — to gain a foothold in its future.
One of Mnuchin’s counsellors, Craig Phillips, is leading Trump’s review of the Postal Service, along with Kathy Kraninger, associate director for general government at the Office of Management and Budget. It is due in July.
The review group is tasked with reviewing the package delivery market, the Postal Service’s role in that market and the decline in first-class mail volume, among other things. It is required to recommend changes to the White House and Congress.
The Postal Service is overseen by a board of nine governors, which pick the postmaster general and the deputy postmaster general. Currently, there are no governors serving on the board, though Trump has nominated three individuals who are awaiting Senate confirmation. The Postal Service, led by the postmaster, works out contracts with private companies that are approved by an independent federal agency, the Postal Regulatory Commission, which also assesses each year whether the contracts are in compliance with the law. Amazon has a multiyear contract with the Postal Service, and it is not clear how quickly it could be changed.
Trump’s attacks on Amazon date to 2015, when he accused Bezos of using The Post as a tax shelter to allow Amazon to avoid paying taxes, a false accusation. (Amazon is a publicly traded company, and The Post, wholly owned by Bezos, is private. The companies’ finances are not intermingled. The Post’s editors and Bezos also have declared that he is not involved in any journalistic decisions.)
Bezos responded to Trump’s 2015 attack with a tweet.
“Finally trashed by @realDonaldTrump. Will still reserve him a seat on the Blue Origin rocket. #sendDonaldtospace,” Bezos, who owns a space company, tweeted in December 2015.
This angered Trump, who at the time was fighting for credibility during the GOP primary.
“Trump takes everything personally,” said Steve Moore, a former economic adviser to Trump during the 2016 campaign.
Moore says he has told White House officials that Amazon is paying the Postal Service plenty for its services and in fact helping the agency survive.
But others say Trump sees one company exploiting the government for a competitive edge. Amazon’s stock price is up close to 70 percent in the past year, and a growing list of competitors have complained that they have a hard time competing with the giant company on everything from delivery to its cloud computer business.
“I think this particular issue is one that he comes at from his business background and understanding the dynamics of cost and delivery and overhead,” Rep. Mark Meadows, R-N.C., said of Trump’s approach to the postal issue with Amazon. “And so . . . when you put all those components in there, it allows him to probably have a position on this that is deeper rooted in an understanding of a business model than perhaps some other presidents.
Top US admiral bristles at criticism of ‘woke’ military: ‘We are not weak’
Adm. Michael Gilday, chief of Naval Operations, rebuffed pointed interrogations by GOP lawmakers who grilled him over his decision to recommend sailors read a book deemed by some conservatives as anti-American.
The U.S. Navy’s top admiral also defended moves to address and root out racism and extremism in the forces as well as its efforts to bolster inclusion and diversity, which have prompted criticism from some conservatives and Republican lawmakers.
“Do you personally consider advocating for the destruction of American capitalism to be extremist?” Rep. Jim Banks, R-Ind., asked Gilday during a House Armed Services Committee hearing Tuesday, referring to a passage from Ibram X. Kendi’s book “How to Be an Antiracist,” which argues capitalism and racism are interlinked.
Banks continued to interrogate the admiral over specific quotes from Kendi’s book, which was a No. 1 New York Times best seller in 2020, and statements he had made elsewhere in the past.
Visibly distraught, Gilday fired back:
“I am not going to sit here and defend cherry-picked quotes from somebody’s book,” he said. “This is a bigger issue than Kendi’s book. What this is really about is trying to paint the United States military, and the United States Navy, as weak, as woke.”
He added that sailors had spent 341 days at sea last year with minimal port visits — the longest deployments the Navy has done, he said.
“We are not weak. We are strong,” Gilday said.
Rep. Doug Lamborn, R-Colo., also challenged the admiral by citing specific quotes from the book and asked him how those ideas laid out by Kendi would further advance or improve the Navy’s power.
Gilday responded by arguing the importance of transparency and open dialogue about racism.
“There is racism in the Navy just as there is racism in our country, and the way we are going to get out of it is by being honest and not to sweep it under the rug,” he expounded, adding that he does not agree with everything the author says in the book.
The key point however, he said, is for sailors “to be able to think critically.”
The exchange was the latest in vociferous complaints from some conservative leaders and lawmakers who suggest the armed forces are becoming a pawn for the country’s culture wars and “wokeness” ideology, as the military takes steps to address issues of racial inclusion, extremism, racism and white supremacy.
And only last week, Sen. Tom Cotton, R-Ark., accosted Secretary of Defense Lloyd Austin about Kendi’s book, which Cotton said promoted “critical race theories” at a different Senate Armed Services Committee hearing where Austin was testifying.
Days earlier, Cotton and Rep. Dan Crenshaw, R-Texas — two combat veterans — launched a “whistleblowers” online platform to report examples of “woke ideology” in the military.
“Enough is enough. We won’t let our military fall to woke ideology,” Crenshaw, a former Navy SEAL, said in a tweet.
Also in February, Austin instructed a one-day stand-down across the Defense Department pausing regular activities to address extremism and white nationalism in the ranks — an issue Austin declared as a priority after a number of rioters at the U.S. Capitol in January were found to have military backgrounds.
The stand down completed in April was an effort to better understand the scope of the problem of extremism in the ranks, Pentagon press secretary John F. Kirby said in a briefing then.
Earlier, Austin had revoked a ban on diversity training for the military.
More recently, in May, a U.S. Army animated ad focused on soldier diversity — featuring the real story of a soldier who enlisted after being raised by two mothers in California — drew criticism and political backlash from some conservative lawmakers.
“Holy crap,” Sen. Ted Cruz, R-Texas, said in a tweet. “Perhaps a woke, emasculated military is not the best idea. . . .”
Cruz was referring to a TikTok video that compared the U.S. Army ad with a Russia campaign that showed buff soldiers doing push-ups and leaping out of airplanes, adding that the contrast made the American soldiers “into pansies.”
The confrontation Tuesday is also the latest in reproaches by Rep. Banks, who is a Naval Reserve officer, and other GOP members over Gilday’s recommendation to include Kendi’s book in the Chief of Naval Operations Professional Reading Program.
In February, Banks sent a letter to Gilday arguing that the views promoted in the book are “explicitly anti-American” and demanded Gilday explain the Navy’s decision to include it on the reading list or remove it.
Gilday responded to Banks in a letter obtained by Fox News saying that the book was included on the list because “it evokes the author’s own personal journey in understanding barriers to true inclusion, the deep nuances of racism and racial inequalities.”
Lamborn and Rep. Vicky Hartzler, D-Mo., also wrote a letter to the admiral to convey their concern about the inclusion of Kendi’s book as well as Michelle Alexander’s “The New Jim Crow” and Jason Pierceson’s “Sexual Minorities and Politics.”
The GOP lawmakers argued the books “reinforce a view that America is a confederation of identity categories of the oppressed and their oppressors rather than a common homeland of individual citizens who are united by common purposes,“ Lamborn and Hartzler wrote, according to Fox News.
Looking back on the 1991 reforms in 2021
Our understanding of events refines with time. New developments reframe the issues, and prompt reassessment of the solutions applied, their design and outcomes. What does looking back on the 1991 reforms in 2021 tell us?
For three decades, India celebrated and criticised the 1991 reforms. The reformers of 1991 say that the idea wasn’t only to tide over a Balance of Payments (BOP) crisis; the changes they brought in went beyond the International Monetary Fund’s (IMF) conditionalities for the bailout. The reforms, they insist, were ‘home-grown’. In the years leading up to 1991, technocrats in government had been thinking and writing about how India’s economic policies had been blocking the country’s rise to potential and the structural changes needed. If the broad range of reforms—including tearing down the industrial license permit raj, an exchange rate correction, and liberalising foreign direct investment and trade policies—could be launched within a matter of days of a new government joining office, they argue, it is because the blueprints were ready, waiting for the go-ahead from the political leadership.
The reformers of 1991 say that the idea wasn’t only to tide over a Balance of Payments (BOP) crisis; the changes they brought in went beyond the International Monetary Fund’s (IMF) conditionalities for the bailout.
At least two well-regarded technocrats that were important in the 1991 reforms disagree—publicly and in off-the-record conversations. In a media interview last month, one of them, the economic adviser in the reforms team, Dr Ashok Desai, suggested that if there were any reformers in government before the IMF “forced” India to liberalise in 1991, “they hid themselves very well”. According to him, after the BOP crisis was resolved, finance minister Dr Manmohan Singh turned “dead against reforms”.
The multiple versions of the reforms story make it difficult to separate fact from romance. It cannot be disputed, though, that the 1991 BOP crisis was a turning point for the economy. India had tided over BOP crises earlier with loans from the IMF, repaid them prematurely, and avoided going through with the bailout’s conditionalities. 1991 was singularly different because India was on the brink of default, which is likely to have forced politicians to set politics aside and listen to technocrats. Any default on external obligations would have meant hurting India’s credibility grievously and an inescapable sense of national shame. The government probably took the view that there was no choice other than to take corrective steps. Prime Minister PV Narasimha Rao named Dr Manmohan Singh, who had been a technocrat in government and was well regarded in global policy circles, as his finance minister. Dr Singh clearly had the Prime Minister’s, his party’s and the IMF’s trust. Records irrefutably show that the Congress party’s acceptance of the reversals in the interventionist economic policies of the first four post-Independence decades was not secured by the Prime Minister. He had delegated the task of tackling doubts and resistance within the party to his ministers, in particular, the finance minister and the commerce minister, and an aide in his office. The finance minister defended the reforms on the floor of the house in Parliament.
Taxpayer-funded NPR mocks ‘CaPitAliSm,’ prompting calls to ‘defund’ media outlet
National Public Radio (NPR) ignited a social media firestorm Thursday night over a tweet that appears to mock capitalism, despite taxpayer dollars accounting for much of the organization’s annual budget.
The outlet posted a story titled “And Now, Crocs With Stiletto Heels” that explores a curious new collaboration between luxury fashion brand Balenciaga and Crocs, the rubber slipper company responsible for fashion faux pas among the millions of comfort-clinging owners nationwide.
The caption accompanying the article, which was written in both uppercase and lowercase letters, appears to mock the collaboration: “CaPitAliSm bReEds InNovAtiOn,” it reads.
The tweet’s language sparked outrage on social media, with figures like conservative Tim Young calling out the irony in NPR’s three-word post.
“You wouldn’t exist without capitalism, clown who is tweeting on behalf of NPR,” he wrote.
“Job at public news station wouldn’t exist wo capitalism,” another user echoed. “Are you guys ok?”
“Our tax money shouldn’t pay for this,” one person expressed.
“It’s still a hell of a lot better than communism at breeding innovation, even if some of the products are silly,” one woman fired back.