why is the usps in debt

USPS Workers Are Reporting That Mail Deliveries Are Intentionally "Slowed Down", Girl Who Loves Writing Letters Started a Whole Correspondence Effort with the USPS, How This Guy Scammed UPS Shouldn't Have Been This Easy, But It Was, Jennifer Love Hewitt Is Pregnant on '9-1-1' — Fans Anticipate Pregnancy Storyline, Seth Rogen and Ted Cruz's Twitter Feud, Explained: Here's What Went Down, What Happened in Tacoma? The USPS has always been self-sustaining,” the posts claim. The Postal Service’s 2019 annual financial report shows that the agency had a net loss of $8.8 billion that fiscal year, bringing total liabilities to more than $97 billion. In 2006, Congress forced the Postal Service to prepay health benefits and pensions for … By the end of the decade, the semi-independent government agency's losses had reached a record $8.5 billion, forcing the Postal Service to consider seeking an increase in its $15 billion debt ceiling or face insolvency. The Postal Service’s debt “is a direct result of the mandate that it must … pre-fund the retiree health plan,” the USPS Inspector General wrote in 2015. Postal Service lost money in six out of the 10 years from 2001 through 2010, according to its financial reports. USPS has been around for more than 200 years, but says it is close to being insolvent. The post office has been an American institution since 1775, when Benjamin Franklin was named the first-ever Postmaster General. While pre-funding other retiree benefits is normal for both private and government organizations, pre-funding health benefits … But its depleted cash reserve and new leadership have some worried. Postal Service's (USPS) deteriorating financial condition is unsustainable as a result of trends including:Declining mail volume : First-Class Mail—USPS's most profitable product—continues to decline in volume as communications and payments migrate to electronic alternatives. As CNN reports, the USPS told Congress it would be out of money by September back in April of 2020. It has $15 billion in debt, its statutory maximum. The U.S. “The USPS is not in debt. Postal Service operations and standards and the need for on-time mail delivery during the ongoing pandemic and upcoming election, which as you know may be held largely by mail-in ballot.". The Postal Service’s $15 billion debt is a direct result of the mandate that it must pay about $5.6 billion a year for 10 years to prefund the retiree healthcare plan. Excluding those debt payments, it should be noted, the USPS has finished each year with revenue surpluses for most of the past decade—as a 2018 Trump administration report documented. So it’s your books of stamps, flat-rate boxes, packing and shipping materials, and even the adorable greeting cards they offer at checkout that keeps their operations running. Any other use, in particular any reproduction, communication to the public or distribution of the content of this website, in whole or in part, for any other purpose and/or by any other means, without a specific licence agreement signed with AFP, is strictly prohibited. US Postal Service trucks sit outside the Annapolis, Maryland distribution unit on January 29, 2009 (AFP / Jim Watson), Screenshot of a Facebook post taken on April 14, 2020, Screenshot of the USPS annual financial statement for 2019. “But with COVID-19 our financial situation has gotten even worse,” he added, pointing out that USPS’s most profitable revenue stream, First-Class Mail, is hurt by businesses’ grinding to a halt because of the pandemic. Seventh, and finally, postal operating costs tend to go up because collective bargaining always produces agreements that raise compensation costs. The Postal Service has racked up $160.9 billion in debt from what’s owed prepaying retiree benefits. 5. It’s a common assumption that the USPS is a federal agency, and its 7.3 million workers are federal employees. This requirement has deprived the Postal Service of the opportunity to invest in capital projects and research and development. The Postal Service has been losing money for years, but the need for mail-in ballots during the election has sharpened the focus on the carrier. Pope Moyush. The USPS continues to have no problem paying its operating expenses, including its retirees’ health benefits, WITHOUT any taxpayer funds. The funds are currently awaiting approval from the US Treasury Department. That accounts for virtually all of USPS debt since 2006, when USPS was debt free. Postal Service has an existential problem. Its expenses are also growing faster than its revenue because of increased wages, a decrease in mail volume, and something known as pre-funded healthcare — a hot topic within the postal community. The U.S. All rights reserved. The Postal Service is in dire financial straits because its revenues are insufficient to support its operational costs and liabilities. With a probable mail-in ballot voting system set for this election year, the pressure is on to settle financial unrest and questions of whether the postal service will be equipped to handle the process. The U.S. The only silver lining is that the loss was below the red-ink tsunami of $15.9 billion in 2012. Stay tuned for more on the future of the USPS during this unprecedented time. As of now, the funding is still hanging in the balance. USPS assets are falling and liabilities are soaring. The USPS tracking system is very transparent throughout the process; however, it does not show the exact location of the parcel for several reasons. In 2006, the Postal Accountability and Enhancement Act (PAEA) ordered the USPS to pre-fund employee retiree health benefits for the next 75 years. Mail delivery is a service you receive, but not one you pay for — outside of the postage that you purchase. The USPS is not losing money.” These two statements, along with other assertions about the agency, were shared in various posts entitled “Facts You Should Know” or “USPS Fun Facts.” This post was shared 147,000 times since 2013, while these two from 2018 have more than 100,000 shares combined. AFP has not obtained any rights from the authors or copyright owners of this third party content and shall incur no liability in this regard. Copyright AFP 2017-2020. Even in the digital age, physical postage is still a vital service.Many small businesses depend on the USPS, but reports indicate that the agency may be dying.Entering 2020, the postal service had $160 billion in outstanding debt, and it has been hit hard by the coronavirus pandemic. They gained traction again in August 2020 when Postmaster General Louis DeJoy, a Trump campaign megadonor, was called to testify before Congress over concerns he was working to undermine mail delivery. For many years, the USPS was the only federal agency subject to a pre-funding mandate on future retiree health benefits. The United States Postal Service (USPS), Oliver explained on Sunday’s episode, has been a “Republican punching bag” for years. He said the Postal Service is more than $160 billion in debt. Just wipe the books clean, because paying these debts is draining the Post Office’s cash, which should be invested in new delivery vehicles and overdue capital upgrades. Postal Service page. Come 2012, it had hit its $15 billion legal debt cap [11]. A dispute between Congress and the Trump administration over funding to help the United States Postal Service (USPS) through the novel coronavirus led tens of … So, yes, the USPS ha piled up billions of dollars in “debt” ON PAPER since 2006. This reduction allows the Postal Service to continue to reduce interest costs. Postal experts clapped back, saying these increases “would quickly bankrupt the agency by pricing out the likes of UPS, FedEx and Amazon from contracting with the Postal Service.”. "The Postal Service's $15 billion debt is a direct result of the mandate," the Inspector General wrote in 2015. The first stamps were issued in 1847, and city delivery got its start in 1863. All rights reserved. 6. There’s been a lot of buzz surrounding the United States Postal Service lately, from the speed of mail delivery to the uncertainty of its future. Controllable loss for the year was $3.4 billion, an … Users can access and consult this website and use the share features available for personal, private, and non-commercial purposes. AFP and its logo are registered trademarks. The Postal Service is currently self-supporting, due to its special status as an independent federal agency overseen but not funded by Congress. “The USPS costs taxpayers exactly $0. Under the mandate, they were on the hook to pay between $5.5 and $5.8 billion a year, and postal losses mounted. That’s because the post office is a quasi-federal agency, and as such, is not funded by the U.S. government. The U.S. Post Office owes $100 Billion in benefits to its workers/retirees but doesn’t have the money. The GAO said it returned the USPS to its “high-risk list” a few years ago because it was projected to lose $7 billion but actually lost $8.5 billion in fiscal year 2010. The Postal Service reported a loss of $2.7 billion for the fiscal year that ended Sept. 30. The Fairness Act passed in the House of Representatives in February 2020, and a Senate vote is pending. Partenheimer also blamed “an outdated business model that needs to be addressed through legislative and regulatory reform.”. According to Partenheimer, USPS currently employs 97,000 military veterans, making it “one of the largest employers of veterans in the country.”. Even without paying into its Retiree Health Benefits Fund, the service’s debt grew another $3 billion over the past three years. No assistance was given, however, and the USPS is surviving off of its remaining cash reserves and a $3 billion loan from the US Treasury, placing it further in debt. As planned, the Postal Service reduced its debt level during 2019 by $2.2 billion, finishing the year with $11.0 billion in debt outstanding. Copyright AFP 2017-2020. 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