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Taxpayers Take Note: Another Loss for the Postal Service

by Kevin Glass / /

Groundhog Day took place a week ago and portended six more weeks of winter, but for taxpayers, the U.S. Postal Service’s (USPS) balance sheets released today brought even chillier news. USPS announced another lackluster financial quarter, which included a loss of $540 million for the first quarter of its fiscal year (October-December 2017). And according to National Taxpayers Union (NTU), the Postal Service may soon be delivering an unwanted package to taxpayers’ doorsteps unless top-to-bottom management and mission reforms are made.

Losses at USPS are a sad refrain, like the plot of 1993 film “Groundhog Day” -- the Service has ended in the hole for 11 consecutive years. Not that those years necessarily start out as badly; during the same October-December period in 2016, the Service actually made money ($1.4 billion) before finishing that year in the red. The fact that the current year is already starting out with a $540 million deficit does not bode well for USPS’s managers or its customers.

But taxpayers are concerned too. Given USPS’ $3.8 billion unfunded liability for employee pensions, and $39 billion in retiree health benefit obligations, the pressure is growing for Washington to ride to the rescue and engineer a bailout.

NTU President Pete Sepp has been actively monitoring the Postal Service’s finances, while also communicating the need for lawmakers and regulators to act with urgency. In comments submitted to the Postal Regulatory Commission earlier this month, Sepp implored Chairman Robert Taub to combat the causes of USPS’s declining condition, and propose realistic remedies beyond simply writing off debts to taxpayers or pursuing exotic business lines.

In response to USPS’ first quarter report, Sepp elaborated further on the need for management reforms, saying “it is incumbent upon the Postal Service to implement a more effective system to publicly present and allocate costs borne by each of its service offerings. Full knowledge of product costs is essential to helping the Postal Service act with greater responsibility, and face its failure to make benefit payments for retirees or even its current employees. Unless regulators and leaders in Congress send a wake-up call to USPS, taxpayers will be trapped in their own remake of the Groundhog Day movie – getting the same bad news about USPS over and over again.”