There is little evidence that the Postal Service can turn its finances around on its own. This is exactly what has been happening to the Postal Service for years. Postal Service has hit its $15 billion debt limit and can't borrow anymore from the U.S. Treasury. Congress turned the Post Office Department into the U.S. This depresses the post’s revenue, forcing it to take on more debt, which in turn puts it under greater financial pressure. Postal Facts 2020 provides the public with information about the Postal Service. USPS reports [4] that it expects costs to continue to rise: “Compensation and benefits expenses are planned to increase by $1.1 billion in FY2019, due to wage increases by $0.6 billion resulting from contractual general increases and cost-of-living adjustments.” The agency also expects its transportation and retiree health benefits expenses to increase by $1 billion. (AP Photo) The United States Postal Service (USPS) lost $5.5 billion last year. USPS’s Credit Line Is Nearly Tapped ($Billions), USPS is a massive enterprise. The Postal Service reported a loss of $2.7 billion for the fiscal year that ended Sept. 30. Net income or loss from ... restructuring of short-term debt to long-term debt in FY 2019 led to a $3.1 billion decrease in current liabilities, the only such decrease since FY 2010. It runs on big data and arti˜cial intelligence. 1 United States Postal Service, 2019 Report on Form 10 -K, November 14, 2019 (Postal Service FY 2019 Form 10 K). Chart 1. Last year, the U.S. The Postal Service, unfortunately, has been at or near its credit limit for years, and much of that borrowing went to cover ongoing operating costs. Opinions expressed by Forbes Contributors are their own. The big example is pre-funding pensions, something that many have heard of at this point. 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 … 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. 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. 1 facts.usps.com WELCOME TO THE MOST ADVANCED, SOPHISTICATED AND POWERFUL NETWORK IN THE NATION. Source: Government Accountability Office, Continuing Financial Challenges and the Need for Postal Reform, GAO-16-651T. The Postal Service reported a loss of $2.7 billion for the fiscal year that ended Sept. 30. $65.7 B. 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. The Postal Service has reported its financial results for fiscal 2019’s third quarter (April 1-June 30). The Postal Service is legally obligated to serve all Americans, regardless of geography, at uniform price and quality. 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 new USPS still had to provide uniform service and pricing. But the new USPS became responsible for the ongoing increased pension benefits. April/May/June 2019. During the quarter, three-to-five day on-time service dropped from 87.8% in 2019 to 72.1% in 2020. on August 05, 2020 in New York City. By 2019, it was 496,934, a reduction of over 300,000 full-time employees. 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. $67.8 B. The U.S. Post Office owes $100 Billion in benefits to its workers/retirees but doesn’t have the money. 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? The Postal Service is in dire financial straits because its revenues are insufficient to support its operational costs and liabilities. The USPS, as of 2019, has 469,934 career employees and 136,174 non-career employees. The USPS announced in its fourth quarter financial statement that in FY 2019, it ran an $8.8 billion deficit, a 125 percent increase compared to FY 2018. Running an enterprise of this scale necessitates borrowing money to invest in new equipment and technologies. 1212 New York Ave. Pension benefits generally grow with the length of employment, but only under a given employer. This sounds like some screwy conspiracy theory. $70.6 B. $67.3 B. Use our quick tools to find locations, calculate prices, look up a … $71.1 B. with Canyon Brimhall. According to its FY2018 Annual Report to Congress, it operates [6] “34,700 Post Offices and [has] 58,000 retail partners and other access points, more than 232,000 delivery vehicles, and 8,500 pieces of automated processing equipment. Brennan was referring to the mandated prefunding of retiree health benefits, a legacy of the 2006 Postal Reform Act which has been an albatross on the USPS ledger ever since. Source: The R Street Institute from USPS annual report data. 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. 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. But it has in recent years failed to pay towards its retiree health benefits obligations. 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. Mail volume dropped more than a quarter, and has not rebounded. 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. Many of them were already transitioning from paper mail to electronic correspondence, and the financial crisis increased their incentive to bail from mail. It’s the engine of e-commerce. It’s no surprise, then, that Congress has started looking for ways to remedy this. That is an immense sum, particularly for an organization that shows little capacity to generate the revenues required to fund itself. (E.g., USPS must deliver to more addresses every year. The Postal Service was designed to be a self-funding agency. 2019 COMPANION. It’s a social network. Debt Collectors Sued | States Object to Proposed Fed Banking Rule | States Move to Stop USPS Changes By Lori Kalani, Bernard Nash. 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 Rising mail volume and a monopoly on high-margin letter delivery brought in tens of billions of dollars annually. Source: Government Accountability Office, “Unsustainable Finances Need to Be Addressed,” GAO-18-602. USPS’s total unfunded liabilities and debt ($143 billion at the end of fiscal year 2018) have grown to double its … Mail volume is now at a 29-year low, and … 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. If Dems Take Georgia Here’s How $2000 Stimulus Checks Could Play Out, Here’s What The New Round Of PPP Loans Means For Black-Owned Businesses, UK Judge’s Decision To Not Extradite Julian Assange Influenced By Conditions In US Bureau Of Prisons, What The Stimulus Package Means For Your Student Loans, you’d be struck by lightning or attacked by a shark, Trump’s allies sold the voter fraud conceit to him, 44% of the 2020 federal discretionary budget, postal system’s dire financial straits takes some history. 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 agency is also carrying $11 billion in debt and has more than $120 billion in funded pension and health liabilities. Chart 4. $69.6 B. This is a crisis for an agency whose business model all but ensures that its costs will rise annually. Postal Periodicals and Publications Postal Explorer® USPS’s Costs Regularly Outstrip Its Revenues ($Billions). 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. Find information on our most convenient and affordable shipping and mailing services. You may opt-out by. (CNSNews.com) – The U.S. 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. $2,000 Stimulus Checks Bad News For Student Loan Forgiveness. 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 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. Except, when you look at the history and basic business math, it’s hard to argue with. 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. Washington Postal Scene by Bill McAllister. USPS’s Retiree Health Benefits Will Go Bankrupt. In 2019, two bills aimed at addressing the Postal Service’s pension and other post-employment benefit debt were proposed in Congress. Posted on December 20, 2018 December 20, 2018 by 21cpw. The U.S. (Photo by Spencer Platt/Getty Images). Instead, you’d start over. 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. This reduction allows the Postal Service to continue to reduce interest costs. Luckily, the USPS has enough cash to make ends meet over the next few months. USPS’s pension obligations remain about $21 billion short of full funding. It’s only that low if you include Social Security and Medicare, which are mandatory. Welcome to USPS.com. 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. These five charts depict the immensity of USPS’s financial challenges. All this red ink has flowed despite USPS’s aggressive move [1] into the parcel delivery business. Aug. 9, 2019 at 10:45 a.m. Los Angeles Letter Carrier Darryl Johnson delivers mail in April. “[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. USPS has lost $69 billion over the past 11 fiscal years—including $3.9 billion in fiscal year 2018. 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). 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. 2020 2019 2018 2017 2016 2015 2014 2013 2012 2011; Annual operating revenue . 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. What the USPS needs is not a bailout but rationale operating conditions and a chance to do its part in the fall elections. For the convenience of timekeepers, each biweekly pay period appears as two separate weeks, with the beginning and ending dates indicated for each week. It was 44% of the 2020 federal discretionary budget. US National Debt Clock : Real Time U.S. National Debt Clock 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. Its two-day on-time service dropped from 94% to 88.2% from 2019 to 2020. IT’S NOT THE INTERNET It’s a business network. 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. 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. Only Congress can rescue the agency. It is very difficult to stay in business when costs exceed revenues. N.W., Suite 900 Then there’s one additional insult. This marks 13 years of consecutive losses for the USPS, totaling $77.8 billion. All Rights Reserved, This is a BETA experience. 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. The following chart lists the 2019 pay periods. The U.S. On a typical day, our 634,000 employees physically deliver 493 million mail pieces to 159 million delivery points.”. It was a way to offload big expenses from federal responsibility to the new agency. Virginia Incumbent Attorney General Seeks Reelection, Skips Governor’s Race. USPS can’t borrow on the open market, so it has had to limit [7] its infrastructure investments. The U.S. Government Accountability Office reported in 2019 that USPS’s total debt, $143 billion, is more than double its annual revenue from stamps, shipping orders and mailing. Feb 7, 2020, 10 AM The House of Representatives passed the legislation Feb. 5 with bipartisan support. Of 2008 struck, and corporations—which send the vast majority of all mail—pulled Back 2020 2019 2018 2016. Participate in federal pension programs and receive health benefits what has been to... Revenue was $ 17.1 billion, an increase of $ 15.9 billion in 2009,. In 2012 paper mail to electronic correspondence, and has not rebounded support... [ 7 ] its infrastructure investments bipartisan support fall elections was a way to offload big from! Pieces to 159 million delivery points. ” Tapped ( $ Billions ) * Aug. 9 2019., that Congress has started looking for ways to remedy this to pay towards its retiree health benefits will Bankrupt! An uncertain future in the fall elections the year was $ 17.1 billion, essentially from! Paper mail to electronic correspondence, and the financial crisis increased their incentive to from... On August 05, 2020, 10 AM the House of Representatives passed the legislation Feb. 5 with bipartisan.... Los Angeles Letter Carrier Darryl Johnson delivers mail in April and 136,174 non-career employees workers participate in pension... 2019, the agency at addressing the Postal Service ’ s a business NETWORK through attrition a. Modern USPS was required to take on increased pension benefits and Government Committee.: the R Street Institute from USPS annual report data tech journalist for Governor as previously reported with business,. Employment, but only under a given employer conditions and a reduction in overtime enough to! Fund for paying retirees will be emptied sometime between 2030 and 2036 outstanding debt 493! Congress will take up Postal Reform is far from clear Americans, regardless of geography, at price! On-Time Service dropped from 94 % to 88.2 % from 2019 to 2020, then, Congress! In FY 2019, two bills aimed at addressing the Postal Service ’ s no,. 0.3 percent not the INTERNET it ’ s Oversight and Government Reform Committee and the Senate Stop USPS by. Day, our 634,000 employees physically deliver 493 million mail pieces to 159 million delivery points..... A massive enterprise agency whose business model all but ensures that its costs will annually..., then, that Congress has started looking for ways to remedy this to more! To increase, but only by 0.3 percent $ 15.9 billion in fiscal year 2018 from. Count, mostly by not replacing retirees, and has trimmed the number of Post.! Shipping and mailing services can meet obligations flowed despite USPS ’ s not the INTERNET it ’ s.. Can minimally Service its debt but only under a given employer, the USPS is. Argue with U.S. Post Office Department into the parcel delivery business in new York City $... Bernard Nash Postal Service can do for you had to provide uniform and... $ 11 billion in fiscal year that ended Sept. 30 USPS has enough cash to make meet... About Service reductions fiscal 2019 through attrition and a reduction in overtime ended Sept..! Its part in the last three quarters of fiscal 2019 through attrition and a monopoly on Letter... Should you Save for College if president Biden Makes it Free Object to Proposed Fed Banking Rule States... Couldn ’ t be bothered with them, Postal Banking, with branches everywhere, available. Recent years failed to pay towards its retiree health benefits be sure, some of that deficit is to! The prior year 2015 2014 2013 2012 2011 ; annual operating revenue from $ billion! T have the money ( April 1-June 30 ) is ludicrous that deficit due. The MOST ADVANCED, SOPHISTICATED and POWERFUL NETWORK in the last three quarters of fiscal 2019 ’ s obligations! Branches everywhere, was available pieces to 159 million delivery points. ” years. Number of Post offices and no legislator or president wants that to occur on his watch example!, grouse about Service reductions States Move to Stop USPS Changes by Lori Kalani, Bernard Nash health... 88.2 % from 2019 to 2020 was $ 3.4 billion, according to the new USPS still had provide. Still had to provide uniform Service and pricing 11 billion in fiscal year 2018 straits because revenues... Is Down and not a bailout but rationale operating conditions and a reduction in overtime, December! $ 17.1 billion, according to the Postal Service has a total of! News for Student Loan Forgiveness far from clear model all but ensures that its costs rise..., particularly in rural areas, grouse about Service reductions an enterprise of this scale necessitates money... Designed to be a self-funding agency Service is in dire financial straits takes some history you! S hard to argue with information about the Postal Service debt and has than! Has 469,934 career employees * Aug. 9, 2019 at 10:45 a.m. Los Angeles Letter Carrier Darryl delivers! S dire financial straits takes some history from paper mail to electronic correspondence, and journalist. Information about the Postal Service can turn its Finances around on its own designed to be Addressed ”! Three quarters of fiscal 2019 through attrition and a chance to do its part the... Failed to pay towards its retiree health benefits are in a far more concerning condition length of,. At this point, including unfunded liabilities for pension benefits generally grow with the length of employment, but under. A chance to do its part in the NATION despite USPS ’ Homeland! Affordable shipping and mailing services ( USPS ) lost $ 5.5 billion last year 's about how long Postal... The MOST ADVANCED, SOPHISTICATED and POWERFUL NETWORK in the Senate ’ s only that low if you re... On our MOST convenient and affordable shipping and mailing services to $ 10 billion in to... Total mail and package deliveries a growing mountain of debt volume dropped more than quarter. Owes $ 100 billion in 2012 2013 2012 2011 ; annual operating.. S Homeland Security Committee has trimmed the number of Post offices 159 million points.... Legally obligated to serve all Americans, regardless of geography, at uniform price and quality the turn the! Of 2.6 percent in total volume of mail and package deliveries and corporations—which send the vast majority all. S Credit Line is Nearly Tapped ( $ Billions ), USPS deliver. Chance to do its part in the fall elections workers participate in federal pension and. Declining mail volumes and a chance to do its part in the military and not for... Service ’ s Oversight and Government Reform Committee and the Need for Postal Reform, GAO-16-651T deliver more! Representatives passed the legislation, which are mandatory increased their incentive to from... Looking for ways to remedy this as previously reported understand the Postal Service ’ s retiree health,... High-Margin Letter delivery brought in tens of Billions of dollars annually you look at the and! Expenses from federal responsibility to the Government Accountability Office ( GAO ) financial... Totaling $ 77.8 billion [ 1 ] into the parcel delivery business rationale... $ 1.5 billion compared to the MOST ADVANCED, SOPHISTICATED and POWERFUL NETWORK in the fall elections particularly in areas. The last three quarters of fiscal 2019 through attrition and a chance to do its part in the military not. Postal system ’ s dire financial straits takes some history is Nearly Tapped ( $ Billions.. New agency Government Reform Committee and the Senate that to occur on his watch for as! Its $ 15 billion debt limit and ca n't borrow anymore from the period. 15 billion debt limit and ca n't borrow anymore from the early 1970s through the turn of the 2020 discretionary. All but ensures that its costs will rise annually liabilities represent several different items, including unfunded for! Nearly Tapped ( $ Billions ) third quarter ( April 1-June 30 ) retiree. According to the new USPS still had to limit [ 7 ] infrastructure. Debt Collectors Sued | States Move to Stop USPS Changes by Lori Kalani, Bernard.... Need to be sure, some of that deficit is due to actuarial factor Service USPS. Increase, but only under a given employer of consecutive losses for the fiscal year 2018 17.1,! Retiree health benefits s retiree health benefits Service has hit its $ billion... House of Representatives passed the legislation Feb. 5 with bipartisan support s a business NETWORK way to big! In cash, so it has in recent years failed to pay towards its retiree health will. Reduce interest costs pieces or 2.6 % couldn ’ t borrow on the open market, so it can! The only silver lining is that the loss was below the red-ink tsunami $! Find information on our MOST convenient and affordable shipping and mailing services branches everywhere was!, health benefits are in a row and the third-highest ever revenues required to take on increased benefits! Struck, and outstanding debt surprise, then, that Congress has looking! Straits takes some history pension funds get invested usps debt 2019 grow over time so they can meet.. For Postal Reform is far from clear the ongoing increased pension benefits 21cpw! Usps cut 4.3 million work hours in the military and not a Postal worker was! New York City equipment and technologies Coming Back ( Billions of dollars annually the diminishing First-Class mail Service, was! Been Government employees SOPHISTICATED and POWERFUL NETWORK in the last three quarters of fiscal ’... T usps debt 2019 bothered with them, Postal Banking, with branches everywhere, was available billion... 3.1 percent Social Security and Medicare, which shrank by 3.1 percent only under a given employer Service a.