According to a new GAO report, the Postal Service now faces a “critical shortage of liquidity that threatens its financial solvency and ability to finance needed capital investment.”
USPS had an almost 25 percent decline in total mail volume and net losses totaling $40 billion since fiscal year 2006. While USPS achieved about $15 billion in savings and reduced its workforce by about 168,000 over this period, its debt and unfunded benefit liabilities grew to $96 billion by the end of fiscal year 2012. USPS expects mail volume and revenue to continue decreasing as online bill communication and e-commerce expand.
GAO is recommending that the Postal Service needs to further reduce its expenses to avoid critical financial problems going forward such as being able to fund its retirement obligations and pay debts.
GAO also said that Congress needs to take the following actions:
- Modify USPS’s retiree health benefit payments in a fiscally responsible manner
- Facilitate USPS’s ability to align costs with revenues based on changing workload and mail use
- Require that any binding arbitration resulting from collective bargaining takes USPS’s financial condition into account
GAO cautioned, however, that no one action it outlined enacted by itself will solve the Postal Service’s dire financial situation.
For the full GAO report, see Urgent Action Needed to Achieve Financial Sustainability.
