The quarterly report of the United States Postal Service's (USPS's) financial condition has become such a routine exercise in bad news, that taxpayers may be forgiven for yawning over today's latest release of financial data. In it, USPS states that revenues for the second quarter of fiscal year 2019 (January-March of this year) are "essentially unchanged" from the same period in 2018.
If only that were the case with all the other financial details. Operating expenses rose over the past four quarters, producing a loss of nearly $2.1 billion -- about $800 million higher than the tally for the same four quarters measured between 2017 and 2018.
Why, after racking up $70 billion in debt over the last decade and a similar stretch on the Government Accountability Office's "High Risk" list, is this still happening? Look no further than USPS's statistics on "controllable losses" -- those attributable to managerial decisions rather than fluctuations due to items like workers' compensation liabilities. The controllable loss problem has grown nearly 23 percent between the second quarter of 2018 and 2019. Despite USPS's claim that it "remains focused on aggressive managerial actions," a future payoff in the form of lower overhead remains in doubt. As our colleague Leslie Paige of Citizens Against Government Waste recently pointed out, numerous USPS initiatives touted as cost-savers -- such as "operational window changes" and optimization of highway contract routes -- have fallen woefully short of projected benefits.
To achieve sustainable financial viability, USPS is encouraged to employ a new framework with a wide variety of cost-cutting actions, which can better align costs with revenues. The simple actions of transparently capturing information on what products and ventures are actually profitable for the agency, while also weeding out those that are financially unsustainable – as NTU has championed – are essential.
As the Administration’s recommendations of the Task Force Report continue to be considered, and as the Postal Service prepares a new business plan to submit to Congress, there is hope for the USPS to seize opportunities involving realistic market reforms.Taxpayers are counting on such reforms happening soon -- otherwise, they may find themselves on the hook for a bailout, the likes of which have not been seen since the collapse of Fannie Mae and Freddie Mac more than 10 years ago.