Several weeks ago, the USPS announced Postmaster General (PMG) Megan J. Brennan would be retiring effective January 31, 2020. Brennan has held the position of the 74th PMG for almost five years and her time spent in the position at the Postal Service has seen a number of challenges.
Most notably, the Postal Service has continued careening down an unsustainable financial path, having lost more than $70 billion since 2000 and amassing unfunded liabilities totaling $120 billion. As the prospects for USPS deteriorate further, the taxpaying public has every reason to be wary of any decisions that can impact the long-term financial health of the agency. Taxpayers are no doubt painfully aware of the lessons endured following the fiscal collapse of Fannie Mae and Freddie Mac and the ensuing federal bailouts – all of which may, unfortunately, serve as a roadmap for the USPS as it approaches the not-too-distant point where it will officially run out of cash.
USPS’ fiscal concerns have been further magnified by the agency’s misguided ventures beyond their core service offerings into areas like banking, grocery delivery and same-day delivery, among other missteps. It would appear that despite PMG Brennan’s best efforts, her tenure at the agency has not produced many encouraging developments for taxpayers.
In the weeks ahead, current members of the USPS Board of Governors now 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. The board, led by Chairman Robert M. Duncan and Vice Chairman David C. Williams, should ensure that the next PMG possesses the administrative and financial management skills to address the flaws plaguing the agency’s efficiency and financial viability. 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 that can focus on making transparency a top priority and setting postal prices on par with reality.
At the outset of this year, USPS regrettably advanced the single biggest price hike on first class mail in its history by bumping up letter mail prices by 10 percent. The agency did so before issuing a top-to-bottom reformed business plan — a plan that has still yet to be delivered. Neglecting to conduct a full and open review of how USPS manages its money is a disservice to millions of customers who also routinely face reduced mail service quality.
Reversing the Postal Service’s dangerous course will depend heavily on structural remedies to improve cost and revenue transparency of all services, and better performance on letter mail service for all postal customers. Achieving this level of accountability and sustainability will be critical for Members of Congress and for the next Postmaster General.
Moving forward, the incoming PMG must quickly usher in a responsible plan, building off some of the market-oriented fixes suggested by the U.S. Treasury to reverse decades of fiscal calamity. Proactively instituting commonsense balance sheet reforms must become a priority, rather than potentially saddling taxpayers with the burden of a massive federal intervention that will cover past debts and future liabilities.
Although the agency 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 services that millions of Americans rely on every day. NTU has been a vocal proponent of better managing costs, transparently capturing information on agency operations that are and are not profitable, and decisively acting upon such data.
The road ahead will be difficult to navigate, but American taxpayers deserve the necessary postal reforms needed to steer clear of a federally funded bailout.