Another Year, Another Loss for the US Postal Service

Yesterday, the United States Postal Service (USPS) announced an annual loss of $8.8 billion for fiscal year 2019, more than double its annual loss for FY18. This loss, the largest on record, marks the 13th consecutive year the USPS has finished in the red. The financial statement rekindles the alarms expressed by the National Taxpayers Union (NTU) about the implications that the Postal Service’s failures to address its dire finances may have for the taxpaying public. NTU Policy and Government Affairs Associate Thomas Aiello issued the following statement in response to yesterday’s USPS report:

“The latest U.S. Postal Service fiscal report details yet another year deep in the hole, and brings the Service’s total losses to a staggering $75 billion since 2007. It’s crystal clear that if this were a business truly competing in the private market it would have gone bankrupt many years ago. But thanks to government-guaranteed lines of business and the ability to default on obligations with little consequence, the Service has managed to limp along. Taxpayers beware: you’re next in line to cover USPS’s shortfalls. While it’s somewhat encouraging to see a slight increase in operating revenue, those gains were completely washed away due to the 7.3 percent surge in operating expenses. These trends and accumulation of unfunded liabilities have extended the threat of a taxpayer bailout of the USPS over the long-term. 

Even before the fiscal year report was released, NTU wrote earlier this week about the urgency for the next Postmaster General (PMG) to be committed to implementing market-driven reforms. In the weeks ahead, the USPS Board of Governors will have the chance to elect a new PMG that can take charge on the priorities needed to change the fatal course of the agency’s operations. NTU has long expressed concerns over the financial risk the USPS poses in sticking with the status quo. Rather than kicking the can down the road, as historically has been the case with necessary postal reforms, the agency would be far better suited to elect a leader who can focus on making transparency a top priority and aligning day-to-day operations with economic reality.

In addition, we joined with other taxpayer groups to urge the Board to elect a candidate who has a successful career in managing a private enterprise and has a history of turning around failing companies. From that letter we noted, “the Postal Service needs a leader who can drive out costs and force efficiencies. The person should have expertise: working in or with the logistics industry; addressing a large unionized labor force; dealing with declining demand for some of its products (e.g. mail); and turning around an unprofitable company.”

Although the Service has seen its fair share of hurdles, NTU remains a staunch supporter of making the necessary managerial and structural changes so that taxpayers can rest at ease knowing the USPS is providing the quality products that millions of Americans rely on every day. NTU has been a vocal proponent of better cost management, information transparency about which  agency operations are and are not profitable, and decisively acting upon such data.

The American people deserve actual reforms and a clear path forward, not more red ink. We look forward to continuing our work with the Postal Regulatory Commission to achieve reforms that will put the USPS on a sustainable path forward while mitigating the possibility of a future taxpayer-funded bailout.”