The Postal Service lost $8.8 billion in fiscal year 2019 according to the fourth quarter financial report released on November 14. While there were some positive signs as operating revenue increased by $514 million over 2018 for a total of $71.1 billion, the USPS continues to be held back by the retiree healthcare prefunding mandate set by Congress in 2006.
In a financial call the same day, USPS Chief Financial Officer and Executive Vice President Joseph Corbett said that the combined obligations of retiree health prefunding, the Civil Service Retirement System (CSRS), and the Federal Employees Retirement System (FERS) meant that the agency had to default on $7.3 billion in payments this year. The prefunding mandate caused $4.5 billion of that loss, according to the report.
While the revenue growth is a positive sign, Postmaster General Megan Brennan said during the call that “we can’t cost cut our way to prosperity or grow our way out of this. We need structural reform. We need Congress to act.”
As Brennan prepares to retire at the end of January, the stark numbers serve as a reminder that the next USPS chief will inherit an agency with deep budgetary problems. Without serious postal reform beginning in Congress, getting the Postal Service back in the black will be next to impossible. Meanwhile, the Board of Governors has “enlisted a search firm” to help recruit the new postmaster general in the coming months.
The USPS Fairness Act (H.R. 2382) to end the prefunding mandate sits at 284 bipartisan cosponsors as of today. Only six more cosponsors are needed to get the bill on the Consensus Calendar in the House.
Prefunding Mandate Continues to Cause Financial Losses for the USPS
Also see: Prefunding Bill Reaches 285 Cosponsors