app. coming up in about half an hour, former joint chiefs of staff on u.s. relations with north korea. that will be live at about 12:30 eastern. until then, some of this morning's washington journal. each week and this segment we take a look at how your money is at work in a different girl program. this week, president trump helped pick our topic with a series of recent tweets about amazon and its impact on the u.s. postal service. joining us at our desk is kevin who has worked on postal reform in his role at vice president of public policy at the institute. here is one of the president's recent treats from april 3. cuttinght about amazon

the united states post office massive amounts of money for being their delivery boy. amazon should babies cost and not have them borne by the american taxpayer. many billions of dollars, post office leaders don't have a clue, or do they. is the president wrong in his criticism? the particulars are not quite correct. he does surface a larger issue. the postal service is not paid for by taxpayers. it is paid for by the folks who send the mail. it does not get appropriations each year. mailers pay is that the postage that amounts to almost $70 billion per year. issue, is the matter of large shippers and large mailers making deals with the postal service. the details are just not publicly available. which plays into trump's trope about washington insider is him. host: what do we know about amazon and this deal?

do we know how long it has been around? or how much gets made off of this? is thathe first thing the freedom of information acts -- act applies to -- any agency can use this exemption to withhold information. one of these is for -- information. if you say you want to see the deal you will get a form back saying no. we don't know about amazon or any other big companies deals with the postal service. we don't know what they are paying. we don't know if they are lucrative. host: how long has the post office been entering into thes 4 fields? guest: it has been going on for a long time. it has brought the postal service a whole lot of revenue. 10 years ago the postal service was hardly in the business. they did about $1.5 billion in revenue out of the budget back

then that was about $70 billion. it is a small revenue stream. now, they are still stuck at about $70 billion but they are raking in 20 billion and parcel revenue. which has been much needed considering the rest of the lines of business are dying. host: we are talking about the postal service and its relationship with amazon. your money segment of the washington journal. phone lines for republicans, (202) 748-8001. (202) 748-8000. , (202) 748-8002. host: we work in a variety of areas. criminal justice reform, postal reform, technology policy. we are into a whole bunch of areas. we have about 55 employees. we are having a good time. backgroundabout your

guest:. i first picked up postal issues in 2003. i had a boss, i was brought in. he said would you like to work up as policy. i thought i guess so. two years later he retired and i became the head of the postal policy. guest: -- joined us -- -- joined us a few times. we will talk about that in a segment. we have a special line as well for postal workers. (202) 748-8003. i want to come back to the package delivery that the postal service does. it is up from $3.7 billion just five years earlier. is this a place where the post office is making money? it is hard to tell. you'd think it would be easy to figure out. revenue money cost equals whether or not you have a profit. the postal service is a massive enterprise.

figuring out how to attribute a bridge -- a particular cost to whether it is paper mail versus complicatedmore than you would expect. especially in a time of rapid growth. the number of parcels they have -- they are carrying has quintupled in years. host: what is the biggest expense for the postal service? in 2017,did they make 60 $9.6 billion it is expensive. of.3 billion with a net loss 2.7 billion. what do you attribute that lost to? guest: certainly it is revenue stagnant. it is hard for any business to --y profitable when you are when your main line of business has not grown. mail volume has actually fallen by close to 30% in the past decade. parcels are the sole exception there. the postal service has kind of

been in a host: -- criticism,the amazon has the president ever gotten directly involved in the deals that get negotiated between the big shippers and the -- ? guest: no. it is a very bureaucratic process laid out in federal regulation. the president plays zero role whatsoever. i would resume -- presume has never seen the details of any of these arrangements. host: who are the people who make those arrangements? guest: the postal service. they sit down andguest: come to an agreement which gets sent over to the postal regulatory commission. host: what is that? regulatoryndependent body whose job it is to keep an eye on the postal service. it looks at it and says does this deal comport with law? is rather vague. if it does, the company goes forward. host: you said it has not said

much about this deal with amazon. has amazon said anything about it? guest: i have not seen any details being released. nobody should be sitting there and saying there something sketchy going on. the postal service does deal with tons of private businesses. none of them tweet out or publish these deals because why would you do that in the private sector. host: what level do you have to rise to in terms of shipping to get one of the separate deals? guest: you have to be moving a lot of particles -- parcels. your typical mom and pop shop, they are not going to get the volume size. what the threshold is, i don't know. of those other deals that have been made, have any of those been made public? do we know what these arrangements generally look like? guest: they have not been made public. there have been long simmering allegations about whether the postal service was underpricing. frequently, the accusations are come from postal unions whose

workers feel like they are bearing the brunt of having to carry more stuff. process more stuff. but not necessarily seeing the benefit in terms of more revenue coming in. phone lines again. republicans, democrats, independent, and a special line for coastal workers -- postal workers. david is up worth in texas. republican, go ahead. caller: i have got three or four questions. you said that the post office was not getting taxpayer funds, but they are running these huge deficits. is my understanding they are getting treasury loans that they can't repay. guest: correct. they can borrow up to $15 billion total from the treasury. they maxed out that darling back in 2012. -- that borrowing back in 2012. caller: there is talk that they're not costing the government any money. the only packages -- we get

plenty, and i like that, the only ones i see being delivered are from amazon on sundays. it seems hard to believe that there is an efficiency there if most are practically all the service being done on sundays just for amazon. let me couple that with another the secret deal you just understanding of the way these things are they can't --rk, if i understand this right, they can't have an amazon deal. they would have categories of if you're this volume than you get this deal that would be available to anyone that can match that volume. which means it could not be secret or you can't verify it. if they truly had a volume set, that only value -- only amazon could reach, then that gives

amazon yet another singular monopolistic capability. one last thing, people talk about amazon, there has been other companies that are huge, believe me, i am a free-market have listened to folks talk about it and the difference in how amazon is the first company that they could think of that has been operating for over a decade without a profit, they are doing it based on their capital in their ability to , and anyey for free ,nterest they want to point to all you have to do is watch the stock market and see what happens in anticipation because they are able to drive prices down. wait people out. run them out of business. does anybody really think the prices are not going up later? host: thanks for the questions.

amazon isst, interesting because it has positioned itself so that it is able to use any private shipper that it would like or use the postal service. that is smart. it mixes and matches. in some places it finds the postal service to be better, and other places it uses other shippers. it has cobbled together from the variety of shipping companies out there. arrangements that are working remarkably. they are the first ones to start guaranteeing today delivery and making that the norm. now they have moved to the same day delivery in some locations. they are way ahead logistically of so many other companies. question, you mention that the postal service has maxed out its borrowing limit. what happened when they ran a

2.7 billion dollar net loss in 2017. caller: -- guest: they do have a pretty good supply of cash on hand. they can't borrow more. western logic a check they had about $12 billion in cash. -- last time i checked they had about $12 billion in cash. host: is there a congressional rescue on the way? guest: there's legislation that is been worked on for a long time. postal policy always takes a long time to get through congress. all the stakeholders want something different. it is not clear if the postal bill is going to make it through this year. caller: -- guest: democrats line, go ahead. myler: i get a lot of shipping done because i am handicapped and i really don't like to go do a lot of shopping. of packagesnds

that, when you are checking out, are stated it will be ups, or it or whatever. u.s. postes by office. i don't understand that. i will take my answer of line. it is kind of confounding. what happens is that shipments will be moved, it will be parceled out by different companies. the postal service is really well positioned to do what is called a last mile delivery. they have a couple hundred thousand letter carriers. they go to people's houses and businesses every day regardless. it is very easy for companies to hand it off to the postal service at the end.

it is not unusual to have two or even three companies handling the parcel before it reaches your hands. guest: bill, massachusetts. democrats. wondering -- the guy said amazon raise revenue for the post office. it really means nothing if the revenue is creating a loss. i am self-employed. if i had a million dollars worth of revenue, and i was losing 10%, i'll go out of business. what bothers me most is he mentioned that these numbers are being kept secret. you can't even get the numbers. what the price is, that amazon that is paying and so forth. whenever i hear something like that all i think about is something shady going on. think it is right that we can't get these numbers. numbers, even if the

numbers are released, how the numbers get to find is a whole matter unto itself. a profit should be revenue minus cost. how do you define cost? there have been long-time allegations that they are contributing parcel costs to letters and catalogs and other sorts of mail. these things just keep swirling around. even when numbers get reported out that show the postal service. they will tell you that $20 million in revenue for parcels, they only had around $13 billion in cost. that is a magnificent profit. people ask how are you a in those costs. that is something that happens -- the data and argument has not been taken far enough. obviously, president trump is not satisfied. host: do you know where the president got this number? this is his march 31 week. it is reported that the u.s. post office will lose a dollar

50 on average for each package it delivers for amazon. that amounts to billions of dollars. he says the times reports the size of the companies lobbying staff has ballooned. and that does not include the washington post. increasest office parcel rates, amazon shipping would raise by $2.6 billion. the post office scam must stop. amazon must pay real costs now. host: -- guest: that figure came from a wall street journal op-ed that was published last summer. that op-ed relied upon analysis done by citigroup. , i have been looking for it for months. only about a week ago i got my hands on it. is a real sharp business writer for business insider. he wrote a column taking issue with that number.

which, raises a question as to whose numbers are right and what is the cost. that is where i think trump got the number. host: you have a number in mind that you think is right? guest: no. i'm trained to look for data and assess data before opening my mouth. i know it is unusual in this town. no, i do not. guest: democrat. good morning. caller: good morning. i wanted to point out some of the things people are commenting on. why would you, if you had a big conglomerate, why would you tell everybody what your deal is with them?

-- they have been raising the rates on cargo as well. gasoline is a factor. like mr. koser said, the hughes -- huge organization has larger costs. i think they've been making effort in trying to get a handle on those. i don't believe the numbers of losing the dollars should be in a contract like that. if the numbers are secret, where they get that figure from? host: -- guest: you raise a very good point. these deals get reviewed by the postal regulatory commission upfront. as you well know, what happens subsequently, it could go either way. if there is excessive bad weather for many months, that is going to drive up transportation costs. if there is some sort of rising fuel costs, imagine something

like an airline strike, you never know how complex deals are actually going to play out. host: who does the postal regulatory commission report to? congress. they are an independent regulatory body. right now one of those seat is open. it is a presidential in point -- appointee. folks are wondering, is jump going to put somebody up with that spot. could the president sit in on one of the meetings in which they vote on or review one of these deals that may come through the postal service. guest: that would be extraordinary and i have no idea if out be legally allowed. -- t: host: taking your calls. mark, alexandria, virginia. curious, since we

were discussing the post office losing money, is it actually true that the post office was forced to fund retirement for 75 years. they were funding retirement for people that aren't even born yet . if that is actually the case, didn't that cause the post office to be in the red guest: that is a popular rumor. which has a whiff of truth but is not actually true. no, the postal service did not worth ofund 75 years benefits and benefits for a born postal workers. accountability act did -- to pre-fund its current employees, future retirement benefits. the same way it pre-funds pensions. it was a good concept because this aimed to protect postal

workers to make sure they get their full benefits and make sure the taxpayers did not have to bat -- bail out the postal service. the execution was terrible. that is on congress. it wrote a very aggressive prepayment schedule. service couldl not make you to paying into the health benefits fund for about three years the postal service just defaulted. they have not put a nickel and since then. host: a question from windmills. why did the postal service need to be -- when it is mandated in the constitution? guest: it is not mandated in the constitution. the only thing in the constitution is that congress is given the power -- the power to create post roads and post offices. it does not say we have to have a postal service. if you go back to the days of ben franklin you might be intrigued to find out that a lot of the post offices of the day were actually taverns. people who ran bars could get a postmaster's license and do postal worker -- postal services

through there. prior to 1971 the postal service was a general service and taxpayer dollars did flow into it. in 1971 it was created as a government corporation that was supposed to be self-funded. host: when the postal service got into the package delivery business, do you think it was a good idea? guest: we did not see it happening really. they had been in packages since 1913. their market share had always been small. it had not been a big deal. they also were known as being particularly good at it. they're tracking system was not great. there were complaints about packages getting beat up along the way. the e-commerce era hit and suddenly, kaboom. they go from a big player to a major player. host: was there anybody saying that they should not do that? guest: shipping companies gets concerned that got concerned about a company moving in.

they complained about it. i don't think anybody in congress paid much attention because they love it here it they love the fact that parcels can get to people through the postal service. we will leave this conversation at this point to hear from former joint chiefs of staff chairman and a former north korea advisor from the bush administration to discuss the upcoming meeting between president trump and north korean leader kim jong on. the title of today's session is u.s. north korean relations. efforts.ess on today is a special event because event.ture is an annual we decided, instead of a single lecture that we have this standing panel to talk about an issue that is very preoccupying and perhaps the number one national security challenge for the trump administration.