These five charts depict the immensity of USPS’s financial challenges. 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. During the quarter, three-to-five day on-time service dropped from 87.8% in 2019 to 72.1% in 2020. Retired postal workers participate in federal pension programs and receive health benefits. $68.8 B. The Postal Service has a total debt of around $120 billion, according to the Government Accountability Office (GAO). 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. There is little evidence that the Postal Service can turn its finances around on its own. Debt Collectors Sued | States Object to Proposed Fed Banking Rule | States Move to Stop USPS Changes By Lori Kalani, Bernard Nash. 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. But the new USPS became responsible for the ongoing increased pension benefits. In 2019, two bills aimed at addressing the Postal Service’s pension and other post-employment benefit debt were proposed in Congress. © 2021 Forbes Media LLC. Share. Running an enterprise of this scale necessitates borrowing money to invest in new equipment and technologies. This is a crisis for an agency whose business model all but ensures that its costs will rise annually. This sounds like some screwy conspiracy theory. The Postal Service reported a loss of $2.7 billion for the fiscal year that ended Sept. 30. These funded liabilities represent several different items, including unfunded liabilities for pension benefits, health benefits, and outstanding debt. 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 following chart lists the 2019 pay periods. Postal Service has hit its $15 billion debt limit and can't borrow anymore from the U.S. Treasury. USPS’s total unfunded liabilities and debt ($143 billion at the end of fiscal year 2018) have grown to double its … 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. As planned, the Postal Service reduced its debt level during 2019 by $2.2 billion, finishing the year with $11.0 billion in debt outstanding. It couldn’t move beyond letter and package delivery, although at one point there was a postal banking system that helped low-income and rural people. Mail Volume Is Down and Not Coming Back (Billions of pieces). The U.S. The facts in this publication may be reproduced for the purpose of stating the fact itself, and in a business, informational, academic context and the like, and in the body of text discussing factual subject matter relevant to the fact being presented. Virginia AG Mark Herring reportedly will seek a third term as AG and not run for governor as previously reported. USPS’s Total Debt Is Immense ($Billions) Source: Government Accountability Office, Continuing Financial Challenges and the Need for Postal Reform, GAO-16-651T. (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. Mail volume is now at a 29-year low, and … Last year, the U.S. It was 44% of the 2020 federal discretionary budget. The Postal Service was designed to be a self-funding agency. But it has in recent years failed to pay towards its retiree health benefits obligations. To be sure, some of that deficit is due to actuarial factor. Its two-day on-time service dropped from 94% to 88.2% from 2019 to 2020. The U.S. Post Office owes $100 Billion in benefits to its workers/retirees but doesn’t have the money. All Rights Reserved, This is a BETA experience. Mail volume dropped more than a quarter, and has not rebounded. If banks couldn’t be bothered with them, postal banking, with branches everywhere, was available. The Postal Service said it reduced its debt level during 2019 by $2.2 billion, finishing the year with $11 billion in debt outstanding. 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. The debt it carried jumped from $7 billion in 2008 to $10 billion in 2009. Except, when you look at the history and basic business math, it’s hard to argue with. Chart 4. Here are some highlights: • Revenue. The agency added $7.3 billion in debt in fiscal 2019 related to the retiree … As previously reported, AG Herring will face … Postal Periodicals and Publications Postal Explorer® This reduction allows the Postal Service to continue to reduce interest costs. Pension funds get invested to grow over time so they can meet obligations. $2,000 Stimulus Checks Bad News For Student Loan Forgiveness. Chart 3. 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. Unfortunately, losses are the rule rather than the exception for the agency. This marks 13 years of consecutive losses for the USPS, totaling $77.8 billion. USPS’s Credit Line Is Nearly Tapped ($Billions), USPS is a massive enterprise. This is exactly what has been happening to the Postal Service for years. 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. 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 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. Source: Government Accountability Office, “Unsustainable Finances Need to Be Addressed,” GAO-18-602.