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“Congress ordered the Postal Service to pay, for 10 years, about $5.5 billion per year into this prepayment fund,” said Jim Campbell, lawyer and consultant on the Postal Service. House passes legislation to ease USPS debt burden. Public debt already is $24 trillion, so the public is not terribly harmed by assuming this additional debt — especially if it helps stave off the collapse of the USPS. The thinking was to pay it forward, making sure the money is there when retirees need it. By clicking “I agree” below, you consent to the use by us and our third-party partners of cookies and data gathered from your use of our platforms. By clicking “I agree” below, you consent to the use by us and our third-party partners of cookies and data gathered from your use of our platforms. The 2006 law was meant to correct that. USPS’s total unfunded liabilities and debt ($143 billion at the end of fiscal year 2018) have grown to double its annual revenue.” As CNN reports, the USPS told Congress it would be out of money by September back in April of 2020. When most people think of the Postal Service, they think of letters from grandma or junk mail. Effective March 29, 2020, the Postal Service™ will revise the following books to reflect changes in the method for notifying employees who have an employee receivable: n Employee and Labor Relations Manual (ELM), parts 450 and 460. n Handbook F-101, Field Accounting Procedures, Chapter 15. Postal Service (USPS) ran a deficit of $3.9 billion. Chart 1. No assistance was given, however, and the USPS is surviving off of its remaining cash reserves and a $3 billion loan from the US Treasury, placing it further in debt. Also, the post office couldn’t do it — Campbell said it missed more than half the payments. The Postal Service has maxed out its borrowing from Uncle Sam and missed four retiree program payments. At 4:35 a.m. on December 9, 2006, the 109th Congress adjourned “in a blaze of bickering,” as the Miami Herald headline put it. These five charts depict the immensity of USPS’s financial challenges. “USPS’s total unfunded liabilities and debt ($143 billion at the end of fiscal year 2018) have grown to double its annual revenue.” The USPS told Congress in April that it would run out of money by September of 2020, as Business Insider reports. Frank Todisco has been tracking that. He’s chief actuary at the U.S. Government Accountability Office. He said the Postal Service is more than $160 billion in debt… Postal service can’t deliver long-term, stable jobs, U.S. A key provision of the Act is inclusion of … But its depleted cash reserve and new leadership have some worried. The USPS has adapted with the advent of steamboats, railroads and planes. See our Privacy Policy and Third Party Partners to learn more about the use of data and your rights. Donate today — in any amount — to become a Marketplace Investor. So far, the USPS has paid $20.9 billion but it's also deferred on some $47.2 billion as of September 2019. Will millions spent on ads sway voters in Georgia runoffs? Which begs the question: What's going on at the post office? The House is scheduled to come back from its summer recess later this week to vote on Postal Service legislation. What's going on at the Post Office? At the end of 2019, the GAO calculated that the Postal Service had $160.9 billion in debt, $119.3 billion of which came from retiree benefits. Frank Todisco has been tracking that. Unfortunately, losses are the rule rather than the exception for the agency. And, serious debt. When most people think of the Postal Service, they think of letters from grandma or junk mail. The USPS’s last profitable year was 2006. Politicians love promising jobs. All this red ink has flowed despite USPS’s aggressive move [1] into the parcel delivery business. We use cookies and other technologies to customize your experience, perform analytics and deliver personalized advertising on our sites, apps and newsletters and across the Internet based on your interests. What can Congress do about funding for the USPS and vote-by-mail efforts? But where do the numbers come from? In 2006, Congress passed a law requiring the Postal Service to prepay health benefits for its retirees. Small radio stations in Georgia benefit from big spending on U.S. Senate races. From staring down bankruptcy to fighting mail delays that could’ve shaken the 2020 national election, the USPS has been against difficult circumstances this year all while the 644,000 postal workers ensure the country’s mail is securely delivered in a timely manner. USPS Unfunded Liabilities and Debt as a Percentage of USPS Revenue, Fiscal Years 2007 through 2018. Despite the dire warnings, however, the USPS received no additional funding in the $2 trillion coronavirus stimulus and relief package legislation signed by President Trump on March 27, 2020. The new European data protection law requires us to inform you of the following before you use our website: We use cookies and other technologies to customize your experience, perform analytics and deliver personalized advertising on our sites, apps and newsletters and across the Internet based on your interests. Your investment in Marketplace helps us remain paywall-free and ensures everyone has access to trustworthy, unbiased news and information, regardless of their ability to pay. Postmaster General Louis DeJoy has agreed to testify on Capitol Hill next week. Feb 7, 2020, 10 AM. He said the Postal Service is more than $160 billion in debt. He’s chief actuary at the U.S. Government Accountability Office. The USPS was not in debt to the federal government. The United States Postal Service will play a critical role in the 2020 election. Defenders of the changes said they were necessary to help the USPS get out of financial debt. Mail Volume […] As a nonprofit news organization, our future depends on listeners like you who believe in the power of public service journalism. But while there are problems with the post office’s business model, Congress could shoulder some blame as well. However, the post office can’t change that model without congressional approval. Donate today — in any amount — to become a Marketplace Investor. See our, Read a limited number of articles each month, You consent to the use of cookies and tracking by us and third parties to provide you with personalized ads, Unlimited access to washingtonpost.com on any device, Unlimited access to all Washington Post apps, No on-site advertising or third-party ad tracking. In the waning days of 2020, President Trump signed HR 133, the Consolidated Appropriations Act, 2021. Its budget shortfall has risen to $160bn (£122bn) amid a decade-long decline in mail volume. USPS is $160 billion in debt. In its 2020 fiscal year report, the USPS stated that mail volume had declined by 13.8 billion pieces, accelerated by the pandemic. New Debt Collection Notice Policy. Is There Mail on Election Day 2020? Todisco said the Postal Service has been losing money for a decade, which is not a sustainable business model. “So it’s doubled from a little more than one times annual revenue to over double annual revenue,” Todisco said. Marketplace is a division of MPR's 501 (c)(3). And, serious debt. USPS projected a billion loss in just the controllable part of its business in fiscal 2020, though it is currently working with the Postal Regulatory Commission in hopes of winning the right to "The updated pay scales will take effect pay period 9-20, and the increases will be in workers' paychecks on May 1, 2020. Since then, losses have run between $2.8 billion and $15.9 billion. But Campbell said federal agencies don’t have to make these prepayments. “So this is a recipe for fiscal problems, serious fiscal problems,” he said. All Rights Reserved. (See Figure 1 in report.) The House of Representatives passed the legislation Feb. 5 with bipartisan support. “Retiree health care benefits and pensions are two different things. © 2021 Minnesota Public Radio. In 2006, the Postal Accountability and Enhancement Act (PAEA) ordered the USPS to pre-fund employee retiree health benefits for the next 75 years. Mail pieces dropped from 213 billion in 2006 to 155 billion last year, and the number is expected to decline to 130 billion by 2020. Marketplace Investors kept our work strong in 2020. Article continues below advertisement Here’s why it’s in … Last year, the U.S. This content is currently not available in your region. €5 every 4 weeks or just €50 €20 for the first year, €7 every 4 weeks or just €70 €30 for the first year. “The USPS is not in debt. Postal Service gets new leader as it deals with big financial concerns, How to vote by mail in the general election. Over the past decade, the debt and unfunded liabilities like pensions and health care have outpaced the revenue the Postal Service takes in. Still, those delayed payments still count as an expense -- … The US Postal Service has received a large amount of attention in 2020. While there are many factors that led to the USPS’ current state of debt, there are two primary reasons why that debt has now balloomed. Democrats want to ask him about changes to the Postal Service they say could disenfranchise people planning to vote by mail in the November election. But the USPS is the only one required to pre-fund retiree health care benefits. EIN: 41-0953924. The Postal Service is supposed to be self-funded — not getting any government money. Three small businesses weigh in on the pandemic holiday season, Congress lets paid sick, family and medical leave mandate expire. The legislation, which was welcomed by the Postal Service, faces an uncertain future in the Senate. “So the Postal Service is sort of caught in this squeeze,” said Cornell University public policy professor Rick Geddes, who added that Congress still requires the post office to deliver to every mailbox in the country six days a week. We rely on readers like you to uphold a free press. The Postal Service wants you, millennials. Further, USPS has missed $48.2 billion in required payments for postal retiree health and pension benefits as of September 30, 2018. You also agree to our Terms of Service. At the same time, the GAO reported that “the USPS’s debt and unfunded liabilities have become a large and growing burden – increasing from 83 percent of USPS’s revenues in fiscal 2007 to 148 percent of revenues in fiscal year 2013.” In other words, the USPS spent and owed (unfunded) 48 percent more than the total it took in from revenue in 2013. The sharp reduction in mail delivery caused by the pandemic initially threatened to plunge the agency into even more dire straits, with the Postal Service reporting $2.2 billion in net losses in 2020’s third quarter. However, the post office is still tightly regulated by Congress. Politifact Illinois, No, USPS isn’t operating with a multibillon dollar surplus, Sept. 6 2020 Investopedia, Debt Definition , Sept. 14, 2020 Read About Our Process “The Postal Service needs America's help, and we must answer this call,” said leaders of the Committee on Oversight and Reform. The federal government was in debt to the USPS. How has the pandemic affected USPS? What's going on at the Post Office? 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. 2020-05-29T13:10:00Z The letter F. ... 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