GAO: Postal Service Lacks Funds to Cover its Future Expenses

A GAO report says the Postal Service will likely face difficult decisions in the near future because of its financial situation.

A recent report from the Government Accountability Office found that the Postal Service “faces a serious financial situation with insufficient revenues to cover expenses.”

GAO reviewed Postal Service data on actual capital spending from fiscal years 2007 to 2017 and projected capital spending for fiscal years 2018 through 2028. It noted that the Postal Service plans to increase its capital spending over the coming 10 years, but that revenue uncertainties may force it to make some tough spending decisions.

Line chart from GAO report on the Postal Service showing USPS historical and projected spending from 2007 to 2028

Some of these uncertainties include potential decline of revenue from first class mail, increased competition for package shipments from other companies, or legislative or regulatory uncertainty including potential actions to address the Postal Service’s ailing financial condition which is now going on over 10 straight years of reported financial losses.

On the latter point, bills have been introduced in the current Congress to address the poor financial condition of the Postal Service, both in the House and Senate. The most recent came out of the Senate and would make a number of changes, such as requiring all Medicare-eligible postal annuitants and employees enrolled in the Postal Service Health Benefits Program to also enroll in Medicare. Neither bill has advanced so far, however.

On the positive side, GAO said it found that the Postal Service has processes that are designed to help it respond to identified budgetary uncertainties.

“As a result, USPS can determine an annual capital spending budget based on the most recent conditions, including the most recent revenue forecasts, and consider possible tradeoffs—such as those between capital spending and other spending needs such as operating expenses,” according to the report.

Addressing Uncertainties and Risks for USPS

About the Author

Ian Smith is one of the co-founders of He has over 20 years of combined experience in media and government services, having worked at two government contracting firms and an online news and web development company prior to his current role at FedSmith.