THURSDAY,NOVEMBER 11 , 2021 .THEWASHINGTONPOST EZ RE A
next decade.Itstimely delivery
service,oncetheenvyoflogistics
operationsaroundtheworldand
the pride of its 644,000-person
workforce,had dippedto levels
leaderssaidwereembarrassing.
Theagencyendsthe2021fiscal
year on much more stable foot-
ing.On-time deliveryscores for
first-classmail,measuredagainst
newslower deliverystandards,
jumpedto 91.1percent in Octo-
ber,the agency reported. Rev-
enue rose against2020 by nearly
$4 billion.Theagencyexpected
to lose $9.7billion in 2021; in-
stead it lost$4.9billion. It’s also
on the vergeofreceiving $
billion from Congressto replace
its outdated deliverytruck fleet
with electric vehicles, and is
pushingCongresstopassabipar-
tisan bill thatwould alleviate
muchofitsdebt.
“The good news is this: They
gotthecountrythroughtheelec-
tion and they’velargely gotten
thecountrythroughthepandem-
ic,”saidPaulSteidler,whostudies
the agencyatthe right-leaning
LexingtonInstitute.
“But one of the things that
enableditwasthisdegradationof
mailservicethatwashighlyprob-
lematic from Novemberto Janu-
arylastyear,thatwas highly
problematic for businessesand
consumers.Andnowitlookslike
mail service is never again going
to be whatitwas. You’re institu-
tionalizingthismind-setfor
slowerservice.”
[email protected]BYJACOBBOGAGEU.S. Postal Service officials say
theyhavethe staffing and re-
sources to handle the coming
onslaughtof holidaypackages,
and avoid arepeatofthe disas-
trous 2020 season thatbrought
maildeliverytoacrawl.
Theagencyoutlined itsholi-
dayplans during ameeting
Wednesdayofits governing
board. Ron Bloom, the panel’s
chair,said the mail service has
added dozens of package-sorting
machinesand will be able to
processan additional 4.5 million
parcels—an18percent increase
—aday.Italso plans to hire
40,000seasonalworkers.
Themovesareadirectresultof
theagency’sdismal2020metrics,
accordingto Postmaster General
LouisDeJoy.
“Lastyear,for avariety of
reasons,wewere overwhelmed
and were not able to meetthe
demandsof the nation,”hesaid.
“Weare ready,sosend us your
packages and your mail, and we
willdelivertimely.”
In December 2020, the Postal
Service was deliveringonly 38
percent of nonlocal first-class
mail on time, ahistoric drop.
Lawmakerswereinundatedwith
complaints fromconstituents
and businessabout late-arriving
holidaypackages and essentials
such as medication, paychecks
andbills.
Consumerfinance experts say
the mail delays contributedto a
rise in late fees on credit cards
andutilitybills.Andpharmacists
begancautioningpatients to
avoid using the mail service to
deliver critical prescription
drugs.
Thebacklogswere so massive
thatmanagers at some postal
processingcentersbeganturning
away incomingtruckloadsof en-
velopesand parcels—the facili-
ties had no room left to store
them.
Holidayletters and packages
are the foundation of the Postal
Service’s annualrevenue —the
agencygenerally does not draw
fundingfromCongress.Afterthe
meeting,the agency announced
plans to raise prices on certain
shipping products, including
popularflat-rateenvelopes, but
up to $1.10. Themove comes as
DeJoyandBloomareinthemidst
of implementing their 10-year
“Deliveringfor America” plan,
whichincludessteepservicecuts
andtwice-annualpriceincreases.
Also Wednesday, Trump ap-DeJoy says USPS is
ready for holiday rush
pointees on the governingboard
took the unusualstep of electing
Bloomtoasecondyear-longstint
as chairmanover the objections
of Ron Stromanand Anton Hajj-
ar,whowereappointedbyBiden.
Thepresident has not said
whether he will tap Bloom —a
Democrat andkey DeJoy sup-
porter whose term expires in
December —toserve anotherseven-yeartermontheboard.
“I voted againstthe selection
of Ron Bloom as board chair
since the presidenthas yetto
renominate him, and his term is
about to expire,”Stroman told
ThePost.
ThePostal Service under De-
Joyand Bloom’s leadershipen-
ters the holidayseason with mo-
mentum thatexperts saywasunimaginableayearago.
When the board of governors
metinNovember2020,theagen-
cy was still enmeshedin legal
disputes over its handling of
mail-inballots during the presi-
dentialelection. It faced more
than$169billionworthofunpaid
obligations with no plan to ad-
dress them, and was on track to
loseanother$160billionovertheBRETTCARLSEN/GETTYIMAGES
Workers processmail at aU.S. Postal Service annex in La Vergne, Tenn.,lastweek.The agency plans to
hire 40,000 seasonal workers, amidother measures, to avoidarepeat of thedisastrous 2020season.structure deal or the pending
Build Back Better legislation —
would exacerbate the inflation-
aryproblems.Instead,theofficial
argued Biden’s agenda would
help alleviate the problembe-
cause both pieces of legislation
are focused on increasing eco-
nomiccapacity.
TheWhite House Councilof
EconomicAdvisersand Office of
Management and Budget have
publishedanalysesarguingthe
Build Back Better legislation
would actually lower prices for
mostAmericanfamiliesby cut-
ting the costofprescription
drugs,childcareandhousing.
“Goingforward,itisimportant
thatCongresspassmyBuildBack
Betterplan,whichisfullypaidfor
anddoesnotaddtothedebt,and
willgetmoreAmericansworking
byreducingthecostofchildcare
and elder care, and help directly
lowercostsforAmericanfamilies
by providing more affordable
health coverageand prescription
drugs,”Bidensaidinastatement.
Others are skeptical.Ben Ritz,
directoroftheCenterforFunding
America’sFuture, aD.C.think
tank, cited concerns thatthe
Build Back Better agenda would
add significantlyto next years’s
deficit becausemoneyfor new
programs would be spent before
thetaxestopayforthemcouldbe
collected.
That,inturn, could drive up
prices further,Ritzsuggested. “I
don’t see how we can do that
when inflation is twotothree
timesourtarget,” hesaid.
[email protected]
[email protected]
[email protected]Stein and Pager reported from
Washington.Scott Clement
contributedto this report.tent inflation to Biden’s covid
reliefpackagebut said he sup-
ports the infrastructure and so-
cial spending bills. “Together,
they are smallerover 10 years
thanthispastyear’sstimuluswas
overasingleyear,andinaddition
theyare substantiallypaid for,”
Summerssaid.
MarkZandi,chiefeconomistat
Moody’s Analytics,disagreed,at-
tributingthe inflation ratetothe
impactofcovid-19, particularly
the delta variant, rather than the
reliefpackage.
“This surgeininflation we’re
observing is adirectresult of the
pandemic.Andifthatdiagnosisis
correct, as the delta wave wanes,
inflation will moderate,”Zandi
said. “I think we’reseeing the
worstoftheinflationrightnow.”
Zandi said the inflation is not
transitoryinthesensethatitwill
disappear in the next month or
the next quarter,but it will con-
tinue to wane in the coming
monthsand“begonebythenext
year.” Forthatreason, he argued
current inflationarytrends
should not factor into the debate
overBiden’s economicagenda.
“I don’t thinkwecan takeany
lessonsfrom high inflation now
to whatitmeans for the efficacy
of passingthatlegislation,”he
said of the Build Back Better
framework.“They’renotconnect-
ed.”
Asenior administration offi-
cial said the White House had
always expected the recovery
fromthepandemictobeuneven,
given the unprecedentednature
of reopeningan economyafter it
was so thoroughlyshut down
duringthepandemic.
Theofficial disputed anyno-
tion thatthe president’s eco-
nomic agenda —eitherthe re-
cently passed bipartisan infra-spent less on services during the
pandemic—when manyestab-
lishmentswere closed, from res-
taurants to massageparlors —
and shifted their spending to
goods, drivingup their prices.
Eventuallythose spendingpat-
terns will return to normal,he
added.
“The pandemichas openedup
anhistoricallylargegapbetween
demandfor goods and services,”
Bernstein said. “And thatstrong
goods demand,partially due to
fiscal relief, hasinteracted with
covid to temporarily juice price
growth.”
But it is not clear whether
inflation will slow in time to
prevent Democratsfromsuffer-
ing politicaldamageinthe 2022
midterm elections, where they
alreadyfaceadifficultlandscape.
Even if prices come down in
comingmonths,politicalanalysts
say, manyvoters mayretain an
imageofcosts climbingduring
Biden’s administration.
Economists aredivided on
what the rise of inflation means
forBiden’s broader economic
agenda,which has been tied up
formonthsinCongress.Sincethe
president’s infrastructure bill re-
cently won approval, the focus
has been on the $1.75 trillion
climateandfamilybillthatBiden
callsBuildBackBetter.
LarrySummers, the former
treasurysecretarywho has been
warningaboutrisinginflationfor
months,said Wednesday’sreport
shows the problemis “becoming
moreentrenched.”
“Itseems to me unlikely infla-
tion will return to 2percent
targetlevelswithoutstrongmon-
etarypolicyaction or some kind
of interference with economic
growth,”hesaidinaninterview.
Summersattributesthepersis-thatargumentas inflation has
continued to dominate voters’
concernsthroughouttheyear.
AFox News poll in October
found that53percent of regis-
tered voters were extremelycon-
cernedaboutinflationandhigher
prices, exceeding11 other con-
cerns includingunemployment,
the federal deficit and crime.
More broadly,anNBC News poll
in late October found 57 percent
of Americans disapproved of
Biden’s handlingof the economy,
while40percentapproved.
White House officials remain
optimistic the inflationarypres-
sureswilleventuallysubside.Jar-
ed Bernstein, amember of the
White House Council on Eco-
nomic Advisers,said in aspeech
earlierthisweekthattheaverage
forecastsaw inflation eventually
falling from 4-5percent to 2-
percent.
Likeother economists and ad-
ministration officials, Bernstein
noted thatmanyAmericansbill is going to reduce the costof
goods to consumers,businesses
and getpeople back to work,”
Bidensaid.
TheWhite House has been
increasinglyfocused on trying to
clear backlogsin the U.S. supply
chain, with teams of administra-
tion officials lookingfor ways to
expand the capacitiesof ports
andwaterways.
Theinflationaryheadaches
have provedapolitical and eco-
nomic challengefor the White
House since soon after it led
passageofa$1.9trillion covid
reliefpackageinMarch.
TreasurySecretaryJanetL.Yel-
len and other White House offi-
cialsinitiallysaidinflationwould
prove “transitory,”rejecting criti-
cism from some economists that
the reliefplan would lead to an
overheatingoftheeconomy. They
have been largely consistent in
sticking to their messagethat
inflation would fade with time,
but have been forced to adjust“By all accounts, the threat
posed by record inflation to the
Americanpeople is not ‘transito-
ry’ and is instead getting worse,”
Manchin said in astatement
Wednesday. “Fromthe grocery
storetothegaspump,Americans
knowtheinflationtaxisrealand
D.C.can no longer ignore the
economic pain Americans feel
everyday.” Manchin was making
acutting reference to earlier
claims by the White House that
rising prices were atransitory
sideeffectoftheeconomy’semer-
gencefromthepandemic.
Hiscommentssignaledacon-
cern thatmore government
spendingcould exacerbate infla-
tion, alarmingsome Democrats
thathewouldpullbackfrom
supporting the $1.75 trillionso-
cial safety netand climate pack-
agethatiscurrentlypendingin
Congress.
Thenewflurryofreactionswas
promptedby aBureauofLabor
Statistics reportWednesdaythat
pricesinOctoberrose0.9percent
from September —and more
than6percentoverthepastyear,
the largestannual rise in 30
years. In awritten statement re-
leased soon after thatreport,
Bidensaid“inflationhurtsAmer-
icans’pocketbooks,andreversing
thistrendisatoppriorityforme.”
SeniorWhite House officials
were greatly disappointed by
Wednesday’sreportand sur-
prised at how seriousthe infla-
tionaryproblemsarethroughout
theeconomy, accordingtopeople
familiar with the matter.The
reportalso fueled mountingcon-
cerns about supply chain bottle-
necks.
Forweeks,administrationoffi-
cials have been scramblingto try
to alleviate the economicprob-
lems,frequentlyconveningmeet-
ings across agencies and search-
ing for solutions.But manyad-
ministration officials have con-
ceded theyhavefew policy
optionstobringimmediaterelief
to Americans, and the White
House is concerned about on-
going politicalfallout,especially
aroundtheholidayseason.
Republicansare rampingup
their efforts to tie inflation to
Biden’s spending policies, and
theyseized on Wednesday’sre-
port.
“This will be the mostexpen-
sive Thanksgivingin the history
oftheholiday,”tweetedRep.Elise
Stefanik (R-N.Y.). “The American
people don’t deserve Biden’s
#ThanksgivingTax!”
Such commentsare partofa
broaderGOP efforttopaint a
pictureofaBideneconomythatis
outofcontrol,despitenotablejob
growthandwageincreases.
Most economists saythere is a
limitedamountpresidentscando
to control inflation, especially
when an economyisemerging
from adrastic slowdownlikethe
one imposedby the pandemic.
ButBiden,wholikestotalkabout
the concerns of working-class
Americanslikehis former neigh-
bors in Scranton, Pa., is acutely
aware of the politicalperils of
pocketbookissues.
Biden’s triptothePortofBalti-
more wasintendedto providea
backdrop for his argumentthat
the bipartisan infrastructure bill
recently approvedby Congress
wouldeasetransportationbottle-
necks thatare holdingup goods
and drivingup their cost. “This
BIDENFROMA
Inflation report triggers fresh criticism about new spending
RICKYCARIOTI/THEWASHINGTONPOST
President Biden promotes hisbipartisaninfrastructurebillatthe Port of BaltimoreonWednesday.Hesuggested his agenda is thebestway to lowercosts for families.Source:Bureau of LaborStatistics THE WASHINGTONPOST1985 1990 1995 2000 2005 2010 2015 2020−0+++6%Pricessee fastest annualgrowthinthree decades
U.S. consumerpriceindex, change fromayear earlierRecessionOctober
+6.2%