The United States Postal Service has lost $78 billion since 2007 and its current business model is unsustainable unless Congress intervenes, according to a scathing report Thursday by the Government Accountability Office.
And the crisis could get even worse because of the COVID-19 pandemic, the report said. Postmaster General Megan Brennan told Congress earlier this year that the USPS could lose as much as $13 billion in 2020 because of the virus.
The GAO said the Postal Service’s financial viability has progressively worsened since it was first labeled a “high risk” for insolvency in 2009.
“USPS’s financial viability, however, has been on GAO’s High-Risk List since 2009 due to its poor financial condition, which has worsened in recent years due to declining mail volumes and rising costs,” the report said.
The Postal Service’s cash woes are the result of a 44 percent decline in first-class mail volume since 2006, increased pension and salary costs and rising debts, according to the GAO’s 85-page report.
A spokesperson for the USPS did not immediately respond to a request for comment.
At the end of 2019, the USPS had a $50 billion gap between what it expects to pay out in pension benefits to retired workers and what it expects to collect in revenues, the report said.
The GAO implored Congress to take action in order to improve the USPS’ financial health.
The GAO’s recommended Congress reassess the level of postal service the nation requires, the extent to which the Postal Service should be financially self-sustaining and the appropriate institutional structure.
Congress should also consider reducing USPS mail service like other countries, including New Zealand, have done; restructuring it to function similar to a private company; or making it a taxpayer-funded government agency, the GAO said.
“Absent congressional action on critical foundational elements of the USPS business model, USPS’s mission and financial solvency are increasingly in peril,” the report stated.
“USPS’s growing difficulties to provide universal postal service in a financially self-sustaining manner provide Congress with the need to consider fundamental reform of the entire framework of postal services in the United States,” the report continued.
Republicans on the House Oversight and Government Reform Committee said the GAO report underscores the need to reform the Postal Service.
They urged their colleagues in the House to avoid issuing a taxpayer-funded bailout to save the USPS.
“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,” Rep. Jim Jordan, Ohio Republican and the committee’s ranking member, said in a statement.
Rep. Fred Keller, Pennsylvania Republican, pointed the finger squarely at the USPS’ management
“From years of mismanagement, ballooning costs, and a lack of accountability, the United States Postal Service is truly an agency in dire need of reform,” he said in a statement. “An unrestricted bailout of the Postal Service would be an irresponsible use of taxpayer funds.”
Democrats were mum on the GAO report Thursday, but on Wednesday a group of Senate Democrats sent a letter to Treasury Secretary Steven T. Mnuchin urging him to consider a $10 billion emergency loan or “any other relief” for the USPS.