4/30/19 – The Postal Service’s financial condition has been deteriorating over the past decade for three primary reasons: (1) a decline in first-class mail; (2) expenses increasing at a faster rate than revenues; and (3) requirements put in place by Congress in 2006 to make billions of dollars of payments each year to pre-fund retiree health benefits. To conserve cash, the Postal Service has defaulted on more than $40 billion in payments owed to pre-fund retiree health care expenses. However, the Postal Service’s liquidity continues to dwindle and it faces challenges with having enough cash on hand to conduct its essential mission of providing universal mail service. For all of these reasons, the Government Accountability Office (GAO) has placed the Postal Service’s financial condition on its “high-risk list” since 2009.
CHAIRMAN CUMMINGS OPENING STATEMENT
WITNESSES
The Honorable Megan J. Brennan
Postmaster General, United States Postal Service
Ms. Margaret M. Cigno
Director, Office of Accountability and Compliance, Postal Regulatory Commission
Mr. Chris Edwards
Director of Tax Policy Studies, Cato Institute
Mr. Joel Quadracci
Chairman, President, and CEO, Quad/Graphics
Mr. Fredric V. Rolando
President, National Association of Letter Carriers
DOCUMENTS
Below From Federal News Network
The House Oversight and Reform Committee will try — again — this year to advance bipartisan reform for the U.S. Postal Service in 2019.
Why?
Because it has to, or else the Postal Service will run out of cash by 2024, Postmaster General Megan Brennan told Congress Tuesday.
“Absent legislation and regulatory reform, in all probability, we’ll be out of cash in 2024,” she told the House Oversight and Reform Committee at a hearing on the USPS’ financial status. “That will threaten our ability to meet our obligation to the American public and to our business partners.”
The U.S. Postal Service has been careening toward financial ruin for the past several years.
The Postal Service has suffered $69 billion in net losses over the last decade. Total mail volume has dropped 31 percent and first class mail has fallen 41 percent since 2007.
Unlike nearly every other government agency, USPS is required to pre-fund health benefits for postal retirees. This mandate accounts for 80 percent of those losses, Brennan said. The Postal Service has defaulted on $48 billion in these mandatory payments since 2012 to conserve cash.
If USPS made all of these legally mandated payments in 2019, it will be out of cash in 2020, Brennan said.
In fiscal 2018, the USPS had about $200 million of cash on hand for about two months on any given day. Ideally, Brennan said her agency should have $20 billion in cash on hand for about 100 days.
Brennan said she is working with the Postal Board of Governors to write a business plan that would restore financial stability to the USPS over the next 10 years. The goal, she said, is to find both cost-saving and revenue-producing methods to address a $125 billion funding shortfall, which the agency will experience over the next decade.
But for Rep. Mark Meadows (R-N.C.), who said he has met with USPS more times over the course of his congressional career than any other agency, the Postal Service should be moving with much more urgency on a financial stability plan.
“How long are we going to have to wait for a plan to come from the board, Ms. Brennan? We’ve been dealing with this; it’s been in crisis mode for two or three years,” Meadows said. “When are we going to have a plan?” More at Federal News Network
How many fiscal quarters has the Postal Service lost over 1 billion dollars since Megan Brennan has been the PMG? Time for a change, especially when you drag your heels when you should’ve reported to Congress in a timely fashion. That is unacceptable.
Great job Congressman Meadows, you said it like it is and now maybe the PMG will start taking things a bit more serious and start moving quicker to put a large patch on this sinking ship known as the USPS. Also, it seemed very disrespectful for so many people to be playing with their phones while members of Congress are speaking. I say we give the “business model” problem directly to Mr. Trump and I have no doubt that with his power and business savvy he could fix this by the end of June.
Brennen the Cow, like all postal mgmt., couldn’t run a lemonade stand.
Yes, reform yes, Lets start by reducing salaries 35%, and letting area carriers negotiate a wage based on local salaries, for uneducated unskilled workers. The funny part is with all the new employees salaries and benefits being 1/2 a senior carriers compensation, the postal service still can’t breakeven. All the pfp bonuses on cca retention no doubt.