Given the extraordinary occurrences of 2020, no one can proclaim this year as “normal.” Yet if there is one aspect of normalcy that taxpayers can expect in November of every year, it is that the United States Postal Service will report an annual loss for the fiscal year. And like clockwork, the USPS has reported yet another annual loss, marking the 14th consecutive year the USPS has finished in the red.
Newly reported financial information indicates a loss of $9.2 billion for fiscal year 2020, about $400 million more than its annual loss for FY19. 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 Manager Thomas Aiello issued the following statement in response to the latest USPS report:
“Earlier this year we heard a lot from Congress about the need to 'save the post office' from the Trump Administration, but with these latest numbers it’s clear the post office doesn’t need saving. USPS needs to be completely overhauled to effectively compete in the 21st century. This report is just another piece atop the mounting pile of evidence 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.
The only silver lining in the FY20 report was the rise of overall revenue to $73 billion, an increase of about $2 billion compared to FY19. This increase was driven in large part by the surge of packages, which increased revenues by $6 billion. However, both first class mail and marketing mail volume and revenue dropped considerably over the same period. Worse yet, operating expense rose by $2.4 billion, exceeding the higher revenue figure. It is also unclear how election spending helped buoyed marketing mail numbers so it will be interesting to see those figures in FY2021.
NTU believes in maintaining a financially stable USPS, which is why we have urged Congress for many years to adopt reforms to ensure it will be economically viable in the 21st century. While part of the solution involves finding ways to raise revenue, Congress must prioritize reducing cost inefficiencies. Such reforms should include consolidating post office locations, adjusting delivery schedules, addressing compensation and benefit levels, and expanding private-sector partnerships.
As we wrote to Congress in August of this year, “in the end, USPS needs reform, not bailouts that kick the can marked 'insolvency' down the road toward the not-so-distant future.” We hope the incoming 117th Congress in conjunction with the Biden Administration gets serious about reforms, otherwise we could soon be looking at USPS losses topping $10 billion a year.”