Source: The R Street Institute from USPS annual report data. “[T]he USPS was on the hook for the whole pension of any veteran who worked for it” because of the 2003 Pension Reform Act, Rubio wrote. 1 United States Postal Service, 2019 Report on Form 10 -K, November 14, 2019 (Postal Service FY 2019 Form 10 K). The U.S. What the USPS needs is not a bailout but rationale operating conditions and a chance to do its part in the fall elections. This marks 13 years of consecutive losses for the USPS, totaling $77.8 billion. For example, USPS’s workers’ compensation charge was $3.5 billion last year — much higher than usual due to a change in the way this expense is computed. As planned, the Postal Service reduced its debt level during 2019 by $2.2 billion, finishing the year with $11.0 billion in debt outstanding. If banks couldn’t be bothered with them, postal banking, with branches everywhere, was available. The Postal Service has a total debt of around $120 billion, according to the Government Accountability Office (GAO). $68.8 B. Posted on December 20, 2018 December 20, 2018 by 21cpw. On a typical day, our 634,000 employees physically deliver 493 million mail pieces to 159 million delivery points.”. USPS’s Credit Line Is Nearly Tapped ($Billions), USPS is a massive enterprise. As stated in GAO’s 2019 High-Risk update, USPS faces financial challenges that include the following: Poor financial situation: USPS’s overall financial condition is deteriorating and unsustainable. A major strike by postal workers in 1970 over wages and benefits, even though the law didn’t allow this, started a series of monetary dominoes. Congress turned the Post Office Department into the U.S. The whole result is a USPS that can’t meet its artificial obligations and so is constantly on the look for federal loans to make up the amounts, taken by the federal government for pension funds for people who don’t exist and then spent elsewhere. That is an immense sum, particularly for an organization that shows little capacity to generate the revenues required to fund itself. Chart 3. Even though Trump’s allies sold the voter fraud conceit to him to explain his loss of the popular vote in 2016, the issues the USPS faces are far older and deeper than the current tsuris. Tweet . There is little evidence that the Postal Service can turn its finances around on its own. Total mail and package volume declined by 3.8 billion pieces or 2.6%. Should You Save For College If President Biden Makes It Free? The United States Postal Service (USPS), the nation’s national mail carrier service, is under increased scrutiny from politicians who are warning that the agency is not prepared to handle the tens of millions of mail-in ballots which are expected to be sent for the November election. The Postal Service is legally obligated to serve all Americans, regardless of geography, at uniform price and quality. The U.S. The legislation, which was welcomed by the Postal Service, faces an uncertain future in the Senate. This is exactly what has been happening to the Postal Service for years. Welcome to USPS.com. Chart 5. The U.S. Postal Facts 2020 provides the public with information about the Postal Service. Virginia AG Mark Herring reportedly will seek a third term as AG and not run for governor as previously reported. Use our quick tools to find locations, calculate prices, look up a … The U.S. Source: Government Accountability Office, Continuing Financial Challenges and the Need for Postal Reform, GAO-16-651T. For the convenience of timekeepers, each biweekly pay period appears as two separate weeks, with the beginning and ending dates indicated for each week. © 2021 Forbes Media LLC. 1212 New York Ave. Postal Service (USPS) currently owes $99.8 billion in benefit payments to its current and retired workers but does not have the money, and if Congress does not act to fix the problem, the Postal Service may have to “implement contingency plans to ensure that mail delivery continues,” according to a new report by the Government Accountability Office (GAO). Mail volume is now at a 29-year low, and … Mail volume dropped more than a quarter, and has not rebounded. The Postal Service is in dire financial straits because its revenues are insufficient to support its operational costs and liabilities. Given that the postal service had been a major employer of veterans, that effectively means transferring a significant financial burden from the Department of Defense to the USPS, according to Rubio. From the early 1970s through the turn of the century, the agency frequently broke even. What is certain, however, is that absent a fundamental refashioning of the Postal Service, U.S. taxpayers will have to bail the agency out one day. This sounds like some screwy conspiracy theory. The House will cut short its August recess to address United States Postal Service. on August 05, 2020 in New York City. The U.S. Post Office owes $100 Billion in benefits to its workers/retirees but doesn’t have the money. USPS cut 4.3 million work hours in the last three quarters of fiscal 2019 through attrition and a reduction in overtime. $65.2 B. Ultimately, much of it comes down to a scheme that was a subsidy for the Department of Defense—responsible, by the way, for 18% of all on-budget spending in the 2019 fiscal year. President Trump in recent weeks has called the Postal Service "a joke" as the agency is experiences delays in mail delivery due to the coronavirus pandemic and financial pressures. The Trump administration put forth its own plan [11] for saving the agency, but the response from Capitol Hill has been less than enthusiastic. Luckily, the USPS has enough cash to make ends meet over the next few months. USPS cut 4.3 million work hours in the last three quarters of fiscal 2019 through attrition and a reduction in overtime. Whether the 116th Congress will take up postal reform is far from clear. USPS’s Total Debt Is Immense ($Billions) Source: Government Accountability Office, Continuing Financial Challenges and the Need for Postal Reform, GAO-16-651T. It was a way to offload big expenses from federal responsibility to the new agency. (E.g., USPS must deliver to more addresses every year. IT’S NOT THE INTERNET It’s a business network. Trump 2019 budget proposes numerous USPS changes Feb 16, 2018, 4 AM President Trump’s proposed 2019 budget recommends ending six-days-a-week mail delivery, potentially idling United States postal vehicles on Saturdays. The facts in this publication may be reproduced for the purpose of stating the fact itself, and in a business, informational, academic context and the like, and in the body of text discussing factual subject matter relevant to the fact being presented. (Let’s remember, by the way, that the odds of voting fraud occurring are so low that it’s more likely you’d be struck by lightning or attacked by a shark.). These funded liabilities represent several different items, including unfunded liabilities for pension benefits, health benefits, and outstanding debt. It couldn’t move beyond letter and package delivery, although at one point there was a postal banking system that helped low-income and rural people. Through FY 2019, the USPS’s operating deficit was nearly $75 billion and, according to the Government Accountability Office (GAO), has long-term unfunded liabilities of $161 billion. USPS’s Costs Regularly Outstrip Its Revenues ($Billions). That's about how long the postal service has faced declining mail volumes and a growing mountain of debt. Find information on our most convenient and affordable shipping and mailing services. year 2019, the Postal Service recorded a net loss of $8 8 billion Revenues continue to be pressured by the ongoing erosion of mail volumes Because mail services account for nearly 63 percent of our revenues, this ongoing decline puts significant financial strain on the The U.S. USPS’s Retiree Health Benefits Will Go Bankrupt. The agency is also carrying $11 billion in debt and has more than $120 billion in funded pension and health liabilities. Check out our various publications and manuals to learn more about what the Postal Service can do for you. The agency has around $120 billion in unfunded debt and obligations, most of which flow from compensation and benefits owed to its significant cohort of employees and retirees. During the quarter, three-to-five day on-time service dropped from 87.8% in 2019 to 72.1% in 2020. Its delivery fleet, for example, was mostly manufactured between 1987 and 2001 [8], and is prone to breakdowns and expensive repairs. It runs on big data and arti˜cial intelligence. The debt it carried jumped from $7 billion in 2008 to $10 billion in 2009. USPS can’t borrow on the open market, so it has had to limit [7] its infrastructure investments. The agency added $7.3 billion in debt in fiscal 2019 related to the retiree … Unfortunately, losses are the rule rather than the exception for the agency. Career employees* It was 44% of the 2020 federal discretionary budget. You may opt-out by. Postal Service (USPS) reported operating revenue of $71.1 billion for fiscal year 2019 (Oct. 1, 2018 - Sept. 30, 2019), an increase of $514 million compared to the prior year. House passes legislation to ease USPS debt burden. All Rights Reserved, This is a BETA experience. (AP Photo) The United States Postal Service (USPS) lost $5.5 billion last year. The Postal Service reported a loss of $2.7 billion for the fiscal year that ended Sept. 30. When you were, say, 25, would you expect in ten years to have put aside full retirement savings for yourself and your children and maybe even grandchildren? Its two-day on-time service dropped from 94% to 88.2% from 2019 to 2020. Instead, you’d start over. 2020 2019 2018 2017 2016 2015 2014 2013 2012 2011; Annual operating revenue . Meanwhile, customers, particularly in rural areas, grouse about service reductions. Opinions expressed by Forbes Contributors are their own. The U.S. Postal Service, to run as a self-supporting business. As previously reported, AG Herring will face … Then the Great Recession of 2008 struck, and corporations—which send the vast majority of all mail—pulled back. But the new USPS became responsible for the ongoing increased pension benefits. Postal Service (USPS) ran a deficit of $3.9 billion. This reduction allows the Postal Service to continue to reduce interest costs. “The USPS is not in debt. The big example is pre-funding pensions, something that many have heard of at this point. Ultimately, much of it comes down to a scheme that was a subsidy for the Department of Defense—responsible, by the way, for 18% of all on-budget spending in the 2019 fiscal year. Source: Government Accountability Office, “Unsustainable Finances Need to Be Addressed,” GAO-18-602. N.W., Suite 900 USPS has lost $69 billion over the past 11 fiscal years—including $3.9 billion in fiscal year 2018. 2019 COMPANION. According to Rubio: “Funds are instead being diverted [by Congress] to help pay down the national debt.” The federal government takes the pre-funding and then spends it elsewhere, because it can always cover pension obligations down the line. Aug. 9, 2019 at 10:45 a.m. Los Angeles Letter Carrier Darryl Johnson delivers mail in April. Last year, the U.S. But politicians hamstrung the agency. Postal Service (USPS) recently closed its books for the 2019 fiscal year, and things aren’t looking so good as it heads into 2020.USPS has a whopping $120 billion in pension and other post-employment unfunded liabilities.That’s an amount equal to the GDP of Ukraine. This depresses the post’s revenue, forcing it to take on more debt, which in turn puts it under greater financial pressure. The net loss for the year was $8.8 billion, an increase in net loss of $4.9 billion … Feb 7, 2020, 10 AM The House of Representatives passed the legislation Feb. 5 with bipartisan support. As planned, the Postal Service reduced its debt level during 2019 by $2.2 billion, finishing the year with $11.0 billion in debt outstanding. The following chart lists the 2019 pay periods. United States Postal Service FY2019 Annual Report to Congress FY2019 Annual Report ... Debt $ 11,000$ 13,200$ 15,000(16.7)% (12.0)% ... year 2019, the Postal Service recorded a net loss of $8 8 billion Revenues continue to be pressured by the ongoing Pension funds get invested to grow over time so they can meet obligations. USPS’s pension obligations remain about $21 billion short of full funding. The Postal Service has a total debt of around $120 billion, according to the Government Accountability Office (GAO). President Trump in recent weeks has called the Postal Service "a joke" as the agency is experiences delays in mail delivery due to the coronavirus pandemic and financial pressures. USPS’s total unfunded liabilities and debt ($143 billion at the end of fiscal year 2018) have grown to double its … It’s only that low if you include Social Security and Medicare, which are mandatory. The Postal Service has reported its financial results for fiscal 2019’s third quarter (April 1-June 30). This is a crisis for an agency whose business model all but ensures that its costs will rise annually. Even this was minor, though, in comparison to the treatment by elected officials who saddled the agency with “debt and financial disadvantage,” according to an email exchange I had with Philip F. Rubio, a former USPS letter carrier and now a professor of history at North Carolina A&T State University. The pre-funding is the source of most of the deficits—about $110 billion as a direct result, according to the office of Rep. Peter DeFazio (D-Ore). The burden will fall on the House’s Oversight and Government Reform Committee and the Senate’s Homeland Security Committee. And no legislator or president wants that to occur on his watch. Here are some highlights: • Revenue. $2,000 Stimulus Checks Bad News For Student Loan Forgiveness. $65.7 B. $67.3 B. The United States Postal Service (USPS), the nation’s national mail carrier service, is under increased scrutiny from politicians who are warning that the agency is not prepared to handle the tens of millions of mail-in ballots which are expected to be sent for the November election. The Postal Service presently does have $10 billion in cash, so it certainly can minimally service its debt. Total revenue was $17.1 billion, essentially flat from the same period one year earlier. The GAO estimates USPS’s fund for paying retirees will be emptied sometime between 2030 and 2036. You don’t require full funding in advance, including pensions for people who haven’t been born, let alone hired, unless you want to make it difficult to run the organization. To be sure, some of that deficit is due to actuarial factor. Washington, D.C. 20005, Video: Florida Republicans prepare to challenge election results, Rod Arquette Show Daily Rundown – Monday, January 4, 2021, Podcast: What Do We Do About Tech Censorship? $71.1 B. The Postal Service was designed to be a self-funding agency. In 2006, a Republican-dominated Congress passed a bill, signed by George W. Bush, that required the USPS to pre-fund, over a ten-year period, pensions for 75 years in advance. The Postal Service reported a loss of $2.7 billion for the fiscal year that ended Sept. 30. The Senate is gone, which means anything the House passes will sit doing nothing, and Donald Trump has turned the screws on a potential deal in part, as he’s admitted, over USPS funding and his claims of widespread fraud with mail-in voting. The Postal Service has reported its financial results for fiscal 2019 (Oct. 1, 2018-Sept. 30, 2019). The agency has reduced its staff count, mostly by not replacing retirees, and has trimmed the number of post offices. 2021 AG Elections . Debt Collectors Sued | States Object to Proposed Fed Banking Rule | States Move to Stop USPS Changes By Lori Kalani, Bernard Nash. Mail Volume Is Down and Not Coming Back (Billions of pieces). Chart 4. This is false; the USPS had a net loss of $8.8 billion in 2019, and its total liabilities exceed $97 billion, according to official disclosures. $71.4 B. It is very difficult to stay in business when costs exceed revenues. It’s no surprise, then, that Congress has started looking for ways to remedy this. Running an enterprise of this scale necessitates borrowing money to invest in new equipment and technologies. Virginia Incumbent Attorney General Seeks Reelection, Skips Governor’s Race. If you’re ever dealt with business finance, this is ludicrous. Postal reform is very hard because some stakeholder is inevitably forced to give something up—mailers are loath to swallow large price increases, while postal workers will not accept compensation cuts. That is the eighth annual loss in a row and the third-highest ever. 1 facts.usps.com WELCOME TO THE MOST ADVANCED, SOPHISTICATED AND POWERFUL NETWORK IN THE NATION. In 2019, two bills aimed at addressing the Postal Service’s pension and other post-employment benefit debt were proposed in Congress. $67.8 B. It’s a social network. NEW YORK, NEW YORK - AUGUST 05: A United States Postal Service (USPS) mail box stands in Manhattan ... [+] on August 05, 2020 in New York City. To understand the postal system’s dire financial straits takes some history. My credits include Fortune, the Wall Street Journal, the New York Times Magazine, Zenger News, NBC News, CBS Moneywatch, Technology Review, The Fiscal Times, and Inc. Get my free newsletter at https://eriksherman.substack.com. Every day the network gets smarter, faster and more intuitive, delivering solutions and … According to a study by consultancy Rakuten Intelligence, as of May 2019, USPS handled about one-third of Amazon's deliveries, down from 60% at … Except, when you look at the history and basic business math, it’s hard to argue with. $69.6 B. The agency’s retiree health benefits are in a far more concerning condition. That is largely driven by the diminishing First-Class Mail service, which shrank by 3.1 percent. The only silver lining is that the loss was below the red-ink tsunami of $15.9 billion in 2012. $70.6 B. The USPS Fairness Act , which passed the House at the start of 2020 and is currently before the Senate, is a misguided approach to solving the retirement fund’s issues. But it has in recent years failed to pay towards its retiree health benefits obligations. Package volume continued to increase, but only by 0.3 percent. ), Chart 2. April/May/June 2019. (CNSNews.com) – The U.S. By 2019, it was 496,934, a reduction of over 300,000 full-time employees. These five charts depict the immensity of USPS’s financial challenges. In FY 2019, the USPS saw a decline of 2.6 percent in total volume of mail and package deliveries. That means all pension obligations including those from when the person was in the military and not a postal worker. If you were lucky enough these days to have a real pension and moved from Company A to Company B, the pension benefits at B wouldn’t be a continuation of those at A. 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