PRC GRANTS USPS MULTI-YEAR WAIVER TO ADDRESS FINANCIAL SHORTFALLS
The Postal Regulatory Commission has issued Order No. 9504, which grants the Postal Service a multi-year waiver to address its deteriorating financial condition. To use the waiver, the Postal Service simply must provide advance notice to the Secretary of the Treasury and the Commission.
The financial impact of the waiver in its full term lifts Commission restrictions on how the Postal Service may use approximately $2.4 billion of revenue in FY 2026, and potentially a total of $15 billion or more by the end of FY 2030, which the Commission has already provided through the Retirement Obligation Rate Authority.
The Commission’s Order follows a Postal Service request that the Commission repeal regulations mandating it to contribute minimum amounts toward certain retiree benefits. The Postal Service asserts that it is running out of cash, and it would be able to utilize revenue meant for certain retiree benefits for other purposes, such as covering operating expenditures and funding capital investments, if the Commission grants its petition to repeal the rules requiring it to make these payments.
Due to the seriousness of the Postal Service’s reasons for seeking a repeal of Commission regulations, the Commission has expeditiously granted the waiver in the interest of the public and to provide the Postal Service some breathing room and flexibility to repurpose revenues that it would have used for retiree benefits to execute its contingency plans to avoid running out of cash.
In fact, for more than a decade, the Postal Service has defaulted on its retiree amortization payments and only began making partial payments over the past few years as a result of the additional revenue that comes directly from the Retirement Obligation Rate Authority that the Commission has authorized the Postal Service to generate since 2021. This Order waives the Commission’s rules only on how that revenue is used and does not alter the statutory payment obligations of the Postal Service.
The Commission urges all stakeholders to treat the breathing room provided by the Temporary Conditional Waiver as an opportunity to work toward meaningful and lasting change. In particular, the Commission urges Congress to use this time to address the underlying issue highlighted by the
Commission and the Government Accountability Office in recommending that Congress should consider reassessing and determining the level of universal postal service the nation requires and how that can best be funded.
