The United States Postal Service’s (USPS) financial situation just keeps getting worse – despite passage of legislation last year that was supposed to fix the morass. The Service just reported a massive loss of $2.5 billion in the second quarter of the fiscal year. That comes on the heels of suffering a billion dollar loss in the first quarter.
Taxpayers were recently promised better results than this. Just over a year ago – in April 2022 – President Biden signed the Postal Service Reform Act, which among other things eliminated the USPS mandate to pre-fund retiree health benefits. At the time, this was heralded as the “silver bullet” the agency needed to get its financial house in order. The bill was estimated to save USPS and taxpayers more than $100 billion, with much of that taking effect immediately in the form of $57 billion in deferred payments to the health benefits fund.
However, a year later we can see that this injection of cash was not enough to keep the USPS’s financial ship afloat. This quarter’s $2.5 billion loss was an astonishing $1.8 billion more than it lost last year in the same period, despite the fact that the PSRA reduced annual operating costs by $1.3 billion.
We’re now two years into Postmaster General Louis DeJoy’s 10-year reform plan, which estimated that, by this time, USPS would be breaking even. Yet it’s now pretty clear that the USPS will end this year in the red.
Worse, even after the massive taxpayer bailout, Dejoy is planning yet another increase in postage rates. The proposed three-cent boost would follow hikes that occurred in January of this year and July of 2022. The rate hike, supposedly intended to offset inflation, would be a 5.4 percent increase, which would slightly outpace the current rate of inflation, 4.9 percent.
These latest developments once again show that USPS remains a financial mess. Congress needs to step in with oversight hearings and hold USPS accountable to its own metrics and timelines for improvement of the agency. Taxpayers cannot continue to be expected to pick up the tab time and time again without significant changes to the USPS.