Via FAS – Reforming the U.S. Postal Service: Background and Issues for Congress. Michelle D. Christensen, Coordinator, Analyst in Government Organization and Management; Kathryn A. Francis, Analyst in Government Organization and Management; Garrett Hatch, Specialist in American National Government. August 25, 2016.
“This report provides background information on the responsibilities, financial challenges and workforce issues facing the U.S. Postal Service (USPS). Additionally, it covers the current strategies and initiatives under development by the USPS and discusses further options for postal reforms. In FY2015, the USPS marked its ninth consecutive year of financial losses with a net loss of $5.1 billion. In addition, the USPS has reached its statutory debt limit of $15 billion. In recent years, the USPS has experienced growth in the package and shipping part of its business (known as Competitive Products). The USPS, however, has experienced sharp declines in both volume and revenue of its Market Dominant Products (e.g., First Class single- piece mail). The USPS has struggled in recent years to fulfill its statutory obligation to prefund its health benefits liability for future postal retiree. Under a prefunding schedule established by the Postal Accountability and Enhancement Act, the USPS has made $20.9 billion in contributions since FY2007 but defaulted on its remaining $28.1 billion in payments. In its most recent financial statement, the USPS requested reforms that would integrate postal employee healthcare options with Medicare, thereby reducing costs and making the prefunding liability expense more manageable. Such reforms would require statutory authorization from Congress. This report also covers several issues facing the USPS workforce. In recent years, initiatives designed to restructure the USPS retail and mail processing networks allowed the USPS to implement several workforce reduction strategies that helped cut costs. In FY2015, however, workforce costs increased. According to the USPS , this reversal was due to contract obligations and work hours associated with the growth in its labor-intensive package and shipping business.”