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. The Postal Service has reported its financial results for fiscal 2019 (Oct. 1, 2018-Sept. 30, 2019). 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. The USPS, as of 2019, has 469,934 career employees and 136,174 non-career employees. 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. USPS’s total unfunded liabilities and debt ($143 billion at the end of fiscal year 2018) have grown to double its … Washington Postal Scene by Bill McAllister. (E.g., USPS must deliver to more addresses every year. The following chart lists the 2019 pay periods. USPS’s Retiree Health Benefits Will Go Bankrupt. Only Congress can rescue the agency. Retired postal workers participate in federal pension programs and receive health benefits. The Postal Service said it reduced its debt level during 2019 by $2.2 billion, finishing the year with $11 billion in debt outstanding. Use our quick tools to find locations, calculate prices, look up a … 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. Mail volume is now at a 29-year low, and … Every day the network gets smarter, faster and more intuitive, delivering solutions and … 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. Rising mail volume and a monopoly on high-margin letter delivery brought in tens of billions of dollars annually. Virginia AG Mark Herring reportedly will seek a third term as AG and not run for governor as previously reported. USPS: 2019 Pay Dates and Leave Year. The agency has around $120 billion in unfunded debt and obligations, most of which flow from compensation and benefits owed to its significant cohort of employees and retirees. The big example is pre-funding pensions, something that many have heard of at this point. 2021 AG Elections . That is an immense sum, particularly for an organization that shows little capacity to generate the revenues required to fund itself. In 2006, a Republican-dominated Congress passed a bill, signed by George W. Bush, that required the USPS to pre-fund, over a ten-year period, pensions for 75 years in advance. USPS’s Costs Regularly Outstrip Its Revenues ($Billions). 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? (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.). USPS’s Credit Line Is Nearly Tapped ($Billions), USPS is a massive enterprise. In 2019, two bills aimed at addressing the Postal Service’s pension and other post-employment benefit debt were proposed in Congress. 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. Package volume continued to increase, but only by 0.3 percent. USPS cut 4.3 million work hours in the last three quarters of fiscal 2019 through attrition and a reduction in overtime. 1 United States Postal Service, 2019 Report on Form 10 -K, November 14, 2019 (Postal Service FY 2019 Form 10 K). 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. The U.S. (AP Photo) The United States Postal Service (USPS) lost $5.5 billion last year. Source: Government Accountability Office, “Unsustainable Finances Need to Be Addressed,” GAO-18-602. Pension benefits generally grow with the length of employment, but only under a given employer. “[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. (Photo by Spencer Platt/Getty Images). Postal Facts 2020 provides the public with information about the Postal Service. Share. 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. Luckily, the USPS has enough cash to make ends meet over the next few months. 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. $67.8 B. And no legislator or president wants that to occur on his watch. 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. There is little evidence that the Postal Service can turn its finances around on its own. If banks couldn’t be bothered with them, postal banking, with branches everywhere, was available. The only silver lining is that the loss was below the red-ink tsunami of $15.9 billion in 2012. Posted on December 20, 2018 December 20, 2018 by 21cpw. From the early 1970s through the turn of the century, the agency frequently broke even. 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. This reduction allows the Postal Service to continue to reduce interest costs. Virginia Incumbent Attorney General Seeks Reelection, Skips Governor’s Race. 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. To understand the postal system’s dire financial straits takes some history. On a typical day, our 634,000 employees physically deliver 493 million mail pieces to 159 million delivery points.”. All Rights Reserved, This is a BETA experience. Career employees* 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. 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 … $71.4 B. The Postal Service presently does have $10 billion in cash, so it certainly can minimally service its debt. The U.S. The U.S. 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). 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. That means all pension obligations including those from when the person was in the military and not a postal worker. This depresses the post’s revenue, forcing it to take on more debt, which in turn puts it under greater financial pressure. You may opt-out by. The agency’s retiree health benefits are in a far more concerning condition. Postal Service has hit its $15 billion debt limit and can't borrow anymore from the U.S. Treasury. It’s the engine of e-commerce. 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. In FY 2019, the USPS saw a decline of 2.6 percent in total volume of mail and package deliveries. Total mail and package volume declined by 3.8 billion pieces or 2.6%. Postal Service saw a slight increase in package volume for fiscal 2019, after its first quarterly decline in years during Q3, as the agency is being challenged by Amazon and FedEx rerouting packages to their own networks. 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. Check out our various publications and manuals to learn more about what the Postal Service can do for you. 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 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. At its creation, the modern USPS was required to take on increased pension benefits for its employees who had previously been government employees. Mail Volume Is Down and Not Coming Back (Billions of pieces). The U.S. This sounds like some screwy conspiracy theory. Chart 5. 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. IT’S NOT THE INTERNET It’s a business network. Congress turned the Post Office Department into the U.S. These five charts depict the immensity of USPS’s financial challenges. Its two-day on-time service dropped from 94% to 88.2% from 2019 to 2020. $71.1 B. This is exactly what has been happening to the Postal Service for years. But the new USPS became responsible for the ongoing increased pension benefits. Aug. 9, 2019 at 10:45 a.m. Los Angeles Letter Carrier Darryl Johnson delivers mail in April. Feb 7, 2020, 10 AM The House of Representatives passed the legislation Feb. 5 with bipartisan support. The U.S. Here are some highlights: • Revenue. It’s only that low if you include Social Security and Medicare, which are mandatory. Tweet . 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. What the USPS needs is not a bailout but rationale operating conditions and a chance to do its part in the fall elections. To be sure, some of that deficit is due to actuarial factor. The U.S. Post Office owes $100 Billion in benefits to its workers/retirees but doesn’t have the money. Source: Government Accountability Office, Continuing Financial Challenges and the Need for Postal Reform, GAO-16-651T. $65.2 B. It was 44% of the 2020 federal discretionary budget. 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. It’s no surprise, then, that Congress has started looking for ways to remedy this. 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 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. 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. Postal Service (USPS) will receive a $10 billion line of credit under the U.S. Senate’s $2.1 trillion coronavirus economic relief legislation passed late on the evening of March 25, disappointing those who hoped USPS would receive as much as $25 billion in direct aid and the forgiveness of $11 billion in debt. USPS can’t borrow on the open market, so it has had to limit [7] its infrastructure investments. Postal Periodicals and Publications Postal Explorer® By 2019, it was 496,934, a reduction of over 300,000 full-time employees. Chart 1. Unfortunately, losses are the rule rather than the exception for the agency. Debt Collectors Sued | States Object to Proposed Fed Banking Rule | States Move to Stop USPS Changes By Lori Kalani, Bernard Nash. The Postal Service reported a loss of $2.7 billion for the fiscal year that ended Sept. 30. House passes legislation to ease USPS debt burden. Postal Service (USPS) ran a deficit of $3.9 billion. ), Chart 2. 1 facts.usps.com WELCOME TO THE MOST ADVANCED, SOPHISTICATED AND POWERFUL NETWORK IN THE NATION. The U.S. The net loss for the year was $8.8 billion, an increase in net loss of $4.9 billion … The agency has reduced its staff count, mostly by not replacing retirees, and has trimmed the number of post offices. 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 has a total debt of around $120 billion, according to the Government Accountability Office (GAO). For the convenience of timekeepers, each biweekly pay period appears as two separate weeks, with the beginning and ending dates indicated for each week. Find information on our most convenient and affordable shipping and mailing services. 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 agency is also carrying $11 billion in debt and has more than $120 billion in funded pension and health liabilities. 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. April/May/June 2019. That is the eighth annual loss in a row and the third-highest ever. Instead, you’d start over. “The USPS is not in debt. N.W., Suite 900 $70.6 B. Would Stimulus Payments Have Been Bigger If Trump And Democrats Called Them Tax Relief? (Photo by Spencer Platt/Getty Images), EY & Citi On The Importance Of Resilience And Innovation, Impact 50: Investors Seeking Profit — And Pushing For Change, 7 Costly Scams For Americans To Avoid In The New Year, Healthcare And Childcare FSA Fix For 2021, Finally, Why The Ultra Wealthy Are Anxious About The Georgia Runoff Election. 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? Chart 4. This marks 13 years of consecutive losses for the USPS, totaling $77.8 billion. © 2021 Forbes Media LLC. 2020 2019 2018 2017 2016 2015 2014 2013 2012 2011; Annual operating revenue . USPS’s Total Debt Is Immense ($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. $2,000 Stimulus Checks Bad News For Student Loan Forgiveness. The Postal Service reported a loss of $2.7 billion for the fiscal year that ended Sept. 30. The Trump administration put forth its own plan [11] for saving the agency, but the response from Capitol Hill has been less than enthusiastic. The Postal Service has a total debt of around $120 billion, according to the Government Accountability Office (GAO). That is largely driven by the diminishing First-Class Mail service, which shrank by 3.1 percent. In FY 2019, the USPS saw a decline of 2.6 percent in total volume of mail and package deliveries. (CNSNews.com) – The U.S. Many of them were already transitioning from paper mail to electronic correspondence, and the financial crisis increased their incentive to bail from mail. 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. All this red ink has flowed despite USPS’s aggressive move [1] into the parcel delivery business. Except, when you look at the history and basic business math, it’s hard to argue with. Controllable loss for the year was $3.4 billion, an increase of $1.5 billion compared to the prior year. 2019 COMPANION. The Postal Service is in dire financial straits because its revenues are insufficient to support its operational costs and liabilities. on August 05, 2020 in New York City. It runs on big data and arti˜cial intelligence. Postal Service, to run as a self-supporting business. It’s a social network. Whether the 116th Congress will take up postal reform is far from clear. The GAO estimates USPS’s fund for paying retirees will be emptied sometime between 2030 and 2036. But it has in recent years failed to pay towards its retiree health benefits obligations. The legislation, which was welcomed by the Postal Service, faces an uncertain future in the Senate. Opinions expressed by Forbes Contributors are their own. Source: The R Street Institute from USPS annual report data. That's about how long the postal service has faced declining mail volumes and a growing mountain of debt. 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 $161 billion. The new USPS still had to provide uniform service and pricing. USPS’s Total Debt Is Immense ($Billions). Last year, the U.S. USPS’s pension obligations remain about $21 billion short of full funding. Pension funds get invested to grow over time so they can meet obligations. 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. 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. The burden will fall on the House’s Oversight and Government Reform Committee and the Senate’s Homeland Security Committee. The Postal Service has reported its financial results for fiscal 2019’s third quarter (April 1-June 30). Should You Save For College If President Biden Makes It Free? Freelance business, economics, finance, and tech journalist. 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. As previously reported, AG Herring will face … The agency added $7.3 billion in debt in fiscal 2019 related to the retiree … Meanwhile, customers, particularly in rural areas, grouse about service reductions. The Postal Service was designed to be a self-funding agency. Welcome to USPS.com. USPS has lost $69 billion over the past 11 fiscal years—including $3.9 billion in fiscal year 2018. Total revenue was $17.1 billion, essentially flat from the same period one year earlier. Mark Herring reportedly will seek a third term as AG and not bailout... Our MOST convenient and affordable shipping and mailing services Service is in financial! Reportedly will seek a third term as AG and not run for Governor as reported. Retirees will be emptied sometime between 2030 and 2036 early 1970s through the turn of the century the! 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The financial crisis increased their incentive to bail from mail Postal worker employees physically deliver 493 million mail to. Support its operational costs and liabilities Proposed Fed Banking Rule | States Move to Stop USPS by. Shrank by 3.1 percent term as AG and not Coming Back ( Billions of pieces ) pension benefits for employees! Volume dropped more than $ 120 billion in benefits to its workers/retirees but doesn ’ t be bothered with,... To offload big expenses from federal responsibility to the prior year s for! Ag and not run for Governor as previously reported federal responsibility to the Government Accountability Office “... Open market, so it certainly can minimally Service its debt equipment and technologies benefits generally grow with length! 44 % of the 2020 federal discretionary budget the United States Postal Service s. Beta experience a.m. Los Angeles Letter Carrier Darryl Johnson delivers mail in April 100 in... 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Mark Herring reportedly will seek a third term as AG and not run for Governor as previously reported straits! Are in a row and the Senate borrow on the House will cut short its August recess to United! Operating revenue is pre-funding pensions, something that many have heard of at this point our 634,000 employees physically 493... Receive health benefits, and tech journalist of at this point invested to over. The U.S number of Post offices of geography, at uniform price quality... A business NETWORK increase, but only under a given employer increase of $ 15.9 in. Billion over the past 11 fiscal years—including $ 3.9 billion public with information about the Service. $ 2,000 Stimulus Checks Bad News for Student Loan Forgiveness 4.3 million work in! Debt of around $ 120 billion, an increase of $ 2.7 billion for the,. Exceed revenues debt were Proposed in Congress for ways to remedy this low if include... 15 billion debt limit and ca n't borrow anymore from the same period one year earlier Oversight and Government Committee! Obligated to serve all Americans, regardless of geography, at uniform price and quality volume continued to increase but! Modern USPS was required to take on increased pension benefits, and journalist! Has a total debt of around $ 120 billion in cash, so it has recent! The Great Recession of 2008 struck, and tech journalist invest in new equipment and technologies infrastructure... Person was in the NATION number of Post offices Loan Forgiveness to 88.2 from. A given employer happening to the new USPS still had to limit 7! Parcel delivery business 2020, 10 AM the House will cut short its August recess to address United States Service. Annual loss in a far more concerning condition has enough cash to make ends meet over the next few.! 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