Thank you for contacting me about the United States Postal Service (USPS). I appreciate hearing from you.
The financial condition of the USPS has been deteriorating for over a decade before the COVID-19 pandemic. The USPS has reported net losses for thirteen years in a row, having lost $78 billion during that span. According to the Government Accountability Office (GAO), the USPS has missed nearly $50 billion in required payments for retiree health and pension benefits. Its unfunded liabilities and debt are approximately $160 billion. If the USPS fails to make any more payments, the retiree health benefits fund will be depleted within a decade, according to the Office of Personnel Management. Furthermore, USPS's expenses continue to grow faster than its revenues due in part to rising compensation and benefit costs and a continuing decline in the volume of First-Class Mail.
Of note, the USPS has been an independent executive agency for the last 50 years and does not rely on or receive federal funding to maintain operations although it can "borrow" from the taxpayer (and has borrowed more than $10 billion to cover debts in the last decade). Rather, the USPS is a self-sustaining, business-like entity that derives its revenues from the sale of postage and postal products and services. Despite serious, underlying financial issues, the USPS is not going to run out of money this year. From March 16 to present, USPS revenues were actually $1.3 billion higher than during the same period last year, and the USPS has $15 billion in "cash on hand" - an all-time high. Despite its status as an independent entity experiencing modest revenue growth, House Democrats want taxpayers to give $25 billion to the USPS. Others are suggesting a $10 billion loan, which was authorized by the recently-enacted Coronavirus Aid, Relief, and Economic Security (CARES) Act, should be entirely forgiven.
While the USPS has sufficient funds to cover normal operations and deliver an influx of election mail, a dated business model and billions in unfunded liabilities and debt pose a threat to the USPS's long-term sustainability. In December 2018, the Treasury Department released a report from the Task Force on the United States Postal System. The report, available at https://home.treasury.gov/news/press-releases/sm566n, contains various policy recommendations that can help return the USPS to a sustainable financial path. Additionally, it contains an extensive list of USPS employee organizations and mailing industry trade associations that provided input to the Task Force. The report, as well as nearly a decade of GAO recommendations, makes clear that administrative and legislative reforms are necessary to create a more sustainable business model.
In recent weeks, some politicians and media figures have peddled conspiracy theories about actions taken by the USPS to save money. These persons cite sensible reforms like having mail carriers make only a single delivery run each day (as opposed to multiple runs in the same neighborhood) in order to reduce overtime expenses and removing underused postal boxes (even though 12,000 collection boxes were removed during the Obama administration according to the USPS Inspector General). Given the blowback resulting from misinformation, on August 18, 2020, Postmaster General Louis DeJoy announced that the USPS would be suspending all reforms until after this fall's election and stated that "the Postal Service is ready to handle whatever volume of election mail it receives this fall." You may read the full statement here: https://about.usps.com/newsroom/national-releases/2020/0818-postmaster-general-louis-dejoy-statement.htm.
For further context, even if every voter who participated in the 2016 election voted by absentee ballot this year, that would still amount to less mail than the average amount delivered by the USPS - 400 million - each day. Given the problems in several 2020 primaries with voting-by-mail, concerns about election integrity have far more to do with unrealistic state balloting deadlines, overwhelmed local election offices, and sending ballots universally to people who don't request them (as California and other states plan to do).
I recognize that the Postal Service provides several important services to Americans, especially in rural areas. Postal service workers have only seen their responsibilities grow in recent months due to the COVID-19 crisis and with more people voting by mail. While it is likely that the next COVID-19 bill will give more financial assistance to the Postal Service, efforts to preserve the USPS must be done in a fiscally responsible way that does not shift costs to taxpayers. Although I am not a member of the Senate Homeland Security and Governmental Affairs Committee, which has jurisdiction over issues pertaining to the USPS, please be assured that I will have your thoughts in mind should Congress consider making any legislative reforms or providing further financial assistance to the USPS.
Thank you again for your correspondence. Do not hesitate to contact me in the future if I can be of assistance.
