That doesn’t make sense
A new government report shows the severity of the United States Postal Service’s poor financial conditions and demonstrates the need for a long-term fix for the agency — not a bailout, as Democrats have suggested.
The report, released Thursday by the U.S. Government Accountability Office, found that the Postal Service’s financial problems existed long before the COVID-19 pandemic and highlighted the need for Congress to step in and institute major reforms.
The key data point: Between fiscal years 2007 and 2019, the Postal Service netted losses of approximately $78 billion — and that’s despite receiving roughly $18 billion each year from American taxpayers.
GAO said that the agency has been on its “High Risk” list since 2009 but that financial viability has only worsened since then “due to declining mail volume, increased employee compensation and benefit costs, and increased unfunded liabilities and debt.”
What lawmakers are saying
“This report reiterates what many of us have known for a long time: The Postal Service’s business model is failing and simply throwing more of taxpayer’s hard-earned money at them won’t fix their problems,” House Oversight Committee ranking member Jim Jordan (R-Ohio) said in a statement.
“If Congress is going to be asked to get the Postal Service out of yet another fiscal jam, we owe it to the American people to make sure we aren’t just setting them up for yet another bailout the next time there’s an emergency,” he continued, citing reform initiatives.
“While Democrats continue to push for a complete bailout of the Postal Service in COVID-19-related legislation, the report released today makes clear that the systemic issues within the Postal Service far pre-date this pandemic,” Oversight Committee member Fred Keller (R-Pa.) said.
Earlier this year, during coronavirus stimulus negotiations, the USPS requested a whopping $75 billion bailout from taxpayers citing the economic fallout caused by the virus. Democrats lobbied to get the money into the CARES Act, but Republicans and President Donald Trump pushed back. In the end, the USPS was provided with a $10 billion loan.
In response, House Democrats have continued to push for more funding.
“The Postal Service was technically insolvent to begin with, but the pandemic has completely changed the environment here … the mail volume drop has been catastrophic,” said Rep. Gerry Connolly (D-Va.), who chairs the oversight subcommittee that oversees USPS.
The report recommends an overhaul
The GAO report concluded that “comprehensive, effective, and successful reform” cannot occur until there is clarity around what services the USPS should provide, whether the agency should be financially self-sustaining, and what institutional structure would support these changes.
The office then submitted three recommendations to congressional consideration:
Congress should consider reassessing and determining the level of universal postal service the nation requires. (Matter for Consideration 1)
Congress should consider determining the extent to which USPS should be financially self-sustaining and what changes to law would be appropriate to enable USPS to meet this goal. (Matter for Consideration 2)
Congress should consider determining the most appropriate institutional structure for USPS. (Matter for Consideration 3)
“Absent congressional action on critical foundational elements of the USPS business model, USPS’s mission and financial solvency are increasingly in peril,” the report concluded.
Author: Phil Shiver