How the Postal Service became a flashpoint ahead of the 2020 election

As the 2020 U.S. presidential election ramps up, the struggling Postal Service has become an unexpected flashpoint with many critics arguing that the Trump administration is attempting to undermine the agency millions of Americans intend to use to cast their votes during the coronavirus pandemic.

The Postal Service, long a revered pillar of the American republic dating back to its beginnings, has been brought to the brink of bankruptcy by the pandemic after decades of struggling to navigate an increasingly competitive and technologically oriented marketplace.

The crisis -- involving funding, resources and facilities -- is coming to a head as millions of Americans are now relying on the agency to vote safely during the pandemic, and as President Donald Trump repeatedly attacks the validity of mail-in ballots and makes unsubstantiated claims about the potential for widespread fraud.

In November, 43 states plus Washington, D.C., will offer no-excuse absentee voting, meaning that many ballots will likely be cast by mail -- nine jurisdictions will be proactively sending ballots to active registered voters. Seven states still require an excuse for an absentee ballot.

The contention over mail-in voting deepened as Louis DeJoy, a major Trump campaign donor with questionable financial ties, was appointed the latest postmaster general in May and began implementing a series of changes just months before the November vote.

After mounting pressure, DeJoy announced Tuesday he was suspending some of the changes at the agency "to avoid even the appearance of any impact on election mail."

Postal service's financial crisis was brewing long before COVID-19

The pandemic has exacerbated the Postal Service's financial troubles -- but they have mounted at the agency for years.

The Postal Service’s history can be traced back to nearly the same time the nation started, when founding fathers agreed to its importance during the Second Continental Congress in 1775, according to the agency. In 1971, the postmaster general ceased to be a member of the president's Cabinet.

Despite its storied history, the 21st century brought a new series of hurdles. As the internet and email became the norm, the volume of first-class mail (the agency’s most profitable product) fell by nearly 25% between 2000 and 2010, according to the agency.

Trump has also pinned some of the blame for the post office's financial struggles in recent years on Amazon, which he has previously said does not pay its fair share for the bulk of the Postal Service it uses as demand for e-commerce soars.

The rise of private sector competition for mailing parcels has also delivered a blow. As recently as 2020 -- and as part of his push for new changes -- DeJoy noted there "are alternatives to every product that we offer."

The most recent overhaul of federal law surrounding the post office came in 2006, when Congress passed the sweeping Postal Accountability and Enhancement Act (PAEA), making more than 150 changes to laws concerning the USPS.

Among significant changes in the act was a restriction on rate increases for certain categories such as the profitable first-class mail to a cap based on inflation. The new laws also required that the agency establish the Postal Service Retiree Health Benefits Fund and pay approximately $5.6 billion annually for 10 years to pre-pay for future retirees’ health benefits. The cap on rate increases and rise in retiree benefit costs have been blamed by some for the USPS's debts.

The sweeping new laws essentially went into effect right before the U.S. entered into the Great Recession of 2008. As U.S. businesses took a hit, mail volume -- with more than 95% of mail being business-related -- tumbled. Between 2006 and 2015, mail volume plummeted approximately 28%, according to the agency.

Despite mail volume shrinking, the Postal Services’ costs continued to rise. The agency said that 80% of those costs were personnel-related and hard to reduce.

By 2012, then-Postmaster General Patrick Donahoe testified before a Congressional committee, saying the agency was "at a crossroads" and "our business model is broken."

"If the Postal Service were a private company, we would be engaged in Chapter 11 bankruptcy proceedings," he said at the time.

Despite his pleas, postal reform bills stalled in Congress.

Between 2010 and 2014, the agency reduced its total workforce by 8%, largely through attrition. In May 2012, the Postal Service reduced retail window hours at some of the nation’s smallest post offices in an effort to save money. That same year, the agency also consolidated hundreds of mail processing facilities to further reduce costs.

Despite aggressive cost-cutting, the agency’s financial crisis deepened. From 2012 through 2016, the Postal Service defaulted on $33.9 of the $54.9 billion required by the PAEA for funding future retiree health benefits, the agency said.

In February 2017, Donahoe's successor, Megan Brennan, implored a congressional committee for more legislative reform and highlighted how its dual role as a government service and a business is crippling the agency.

"The Postal Service is a self-funding entity. We pay for our operations entirely through the sale of postal products and services and do not receive tax revenue to support our business," she said.

Despite their aggressive cost-cutting efforts, Brennan said they "have not been enough -- and cannot be enough -- to restore the Postal Service to financial health, absent legislative and regulatory reform."

"Some of our most significant costs are fixed by law and are outside management’s control. Further, our ability to earn revenue to pay for those costs is constrained by law," she said. "This fundamental imbalance is the root of our financial instability."

As of its most recent fiscal year financial disclosure in 2019, the agency reported a net loss of $8.8 billion for the year, and has reported financial losses for 13 consecutive fiscal years.

This year, the COVID-19 crisis walloped the U.S. economy and Brennan warned it could bring imminent liquidity issues. In April, she said the agency would be "out of cash" by the end of September without help from Congress or emergency relief.

In May 2020 -- months before the November vote -- Republican fundraiser and Trump ally DeJoy was appointed the next postmaster general.

Who is Postmaster General Louis DeJoy?

The prominent political donor took over as head of the agency in June, and by July announced a range of operational and procedural changes that he said were aimed at cutting costs. Critics have expressed concern that these new protocols could delay mail delivery, with some suggesting the move could even be interpreted as an effort to undermine the viability of mail-in ballots. Both the White House and the postal service have denied those claims.

DeJoy's appointment also breaks with the norm of previous postmaster general assignments -- the past two in the role have spent their careers at the USPS, while DeJoy's background is in the private sector as the former CEO of a logistics company.

Federal Election Commission filings show Louis DeJoy has donated hundreds of thousands of dollars to GOP candidates and causes, including Trump’s campaign.

DeJoy’s changes at the agency include limitations on overtime hours for mail carriers and limiting trips when a mail truck is not full. Mark Dimondstein, president of the American Postal Workers Union, previously told ABC News that the changes "will do nothing but slow down and delay mail."

He also oversaw a restructuring of leadership at the USPS, the Washington Post reported, and implemented a management hiring freeze.

On Monday, it was announced that DeJoy will testify before the House Committee on Oversight and Reform next Monday to discuss "the sweeping operational and organizational changes he has been making to the Postal Service," according to Rep. Carolyn B. Maloney, D-N.Y. On Tuesday, it was announced he will also testify before Senate lawmakers this Friday.

Though DeJoy suspended some of the changes, more than 20 state attorney generals are forging ahead with at least two lawsuits against the Trump administration and the Postal Service. They allege the service broke the law by making operational changes without seeking approval from the Postal Regulatory Commission and that the changes impede on states' abilities to run free and fair elections.

DeJoy also came under scrutiny for his financial ties (to the tune of $30 million) to a contractor company that processes mail for the USPS. Lawmakers have also questioned his stock purchases with Amazon, calling it a USPS competitor.

DeJoy has denied any wrongdoing, saying, "I take my ethical obligations seriously, and I have done what is necessary to ensure that I am and will remain in compliance with those obligations."

Trump's unsubstantiated attacks on mail-in voting and USPS changes

In a stunning turn of events, the usually innocuous Postal Service has become a flashpoint as millions turn to mail-in and absentee voting amid the coronavirus pandemic and fears emerge that it may be used as a tool for voter suppression.

President Trump has leveled numerous attacks on mail-in voting and the potential for widespread fraud, both in interviews and on Twitter, while offering no evidence for his claims. In a July interview with Fox News, the president said he thinks "mail-in voting is going to rig the election."

Much earlier, in May, the president wrote on Twitter: "There is NO WAY (ZERO!) that Mail-In Ballots will be anything less than substantially fraudulent. Mail boxes will be robbed, ballots will be forged & even illegally printed out & fraudulently signed." His tweet prompted the social media giant to post a fact-checking label about mail-in voting to counter the president's remarks.

Despite his attacks, Trump and first lady Melania Trump both requested mail-in ballots to vote in Florida this year, according to local election officials.

Late last week, however, the USPS sent election officials in 46 states and the District of Columbia warning letters saying that their mail-in ballot rules are "incongruous" with the agency's mail delivery service standards and may result in uncounted ballots, raising further concerns about the viability of a voting platform millions of Americans are expected to use.

A postal service spokesperson said last Friday that the letters were "regular outreach" and part of "continuing educational efforts."

"The letters advised election officials to be mindful of the potential inconsistencies between the Postal Service’s delivery standards, which have been in place for a number of years and have not changed, and the provisions of state law," a spokesperson said. "The purpose of the letters was to assist states in educating their voters on when to request their ballots and to return their completed ballots in accordance with the Postal Service’s mailing standards."

Congressional Democrats led by Senate Minority Leader Chuck Schumer and House Speaker Nancy Pelosi, responded to the warning letters and other changes at the post office by calling on the Post Master General and the Chairman of the Postal Service Board of Governors to testify before Congress.

"The Postal Service itself has warned that voters -- even if they send in their ballots by state deadlines -- may be disenfranchised in 46 states and in Washington, D.C. by continued delays," the Democrats said in a joint statement. "This constitutes a grave threat to the integrity of the election and to our very democracy."

As the controversy over mail-in voting swirled, images of the iconic blue USPS drop-off bins being removed in cities across the country went viral, fueling more anxiety and confusion.

USPS spokeswoman Kimberly Frum said Sunday these removals were part of “routine” efforts to identify seldom-used collection boxes, but said it will halt removals for 90 days because of customer concerns.

Meanwhile, much-needed funding for the USPS has been included in the next COVID-19 relief bill, which has stalled as lawmakers struggle to agree.

Trump came under fire last week for suggesting he’d oppose USPS funding to hurt mail-in voting, but he later backtracked.

The president's comments and the ongoing controversy surrounding DeJoy's leadership appear to have led House Speaker Pelosi to call the House back into session from its summer recess to vote on legislation that would prohibit the Postal Service from implementing any new changes to operations or level of service it had in place on Jan. 1, 2020.

"In a time of a pandemic, the Postal Service is Election Central," Pelosi wrote in a public letter to Democratic colleagues. "Americans should not have to choose between their health and their vote."

A senior House Democratic aide told ABC News on Monday that the House is expected to also vote Saturday on a measure that will include $25 billion in new funding for the post office.

ABC News' Lucien Bruggeman and Olivia Rubin contributed to this report.