Carper urges US Congress to tackle massive Postal Service debts
US Senator Tom Carper has urged Congress to return to the business of crucial postal reforms, as the US Postal Service continues to make multi-billion dollar annual losses. The long-time postal reform advocate is no longer chairman of the important Homeland Security and Senate Governmental Affairs Committee after last November’s election saw the Republicans take a majority in the Senate.
But, on Thursday Carper convened an informal meeting of both sides of the committee in the hopes of getting the Postal Service back on the agenda.
After a string of big losses and payment defaults, the Postal Service is currently stuck at its legal $15bn debt limit, and with unpaid bills currently has $71.1bn in liabilities compared to the total worth of assets, including buildings and equipment, of $25bn.
Last year the federal agency lost $5.5bn.
Although the Postal Service has been contending with an ongoing decline in its $28.3bn First Class Mail service since 2006, the financial crisis has mainly been caused by its Congressionally-required pre-funding schedule, which is funding future healthcare liabilities for retirees.
While the Postal Service itself is working to improve its $67.8bn revenue stream by pushing growth areas like parcel shipping, it needs Congress to reform the pre-funding issues and other areas to help the Postal Service respond to current market trends.
Senator Carper, who was an important voice in the last significant Congressional postal reforms in 2006, last week held a bipartisan briefing on the state of USPS, which he said would be the first of several forums to analyse and discuss the Postal Service and Congressional reform efforts.
Senator Tom Carper told the bipartisan meeting that Congress needs to continue working to pass comprehensive postal reform
Carper, now the top Democrat on the committee (Ranking Member), said Chairman Ron Johnson did attend the briefing.
He said he hoped to continue the dialogue in the coming weeks.
Carper said: “We can’t stand idly by and let an institution that operates at the center of a $1 trillion industry and employs over 7m people falter. While Postal Service management has done what it can to cut costs and compete in the digital age, its needs Congress to help pave a fiscally sustainable path that will enable this American institution to grow and thrive.”
The Democrat from the State of Delaware said the Postal Service remained an “important part” of modern life and the economy, adding that he was committed to working with his fellow members of Congress, the White House and other stakeholders to find a solution to help USPS prosper.
Revenue growth
In a white paper issued earlier this week, the USPS Inspector General said the Postal Service’s financial health “seems to be improving” thanks to growing parcel volumes, cost-cutting and a temporary above-inflation postal rate increase designed to help counter the impact of the recession on USPS finances.
However, the verdict ignores the huge financial obligations placed on the Postal Service by Congress, which require reforms to correct.
USPS does also face other significant challenges, most notably its aging vehicle fleet, the growing US population and resulting expansion of the postal delivery network, the unpredictability of advertising mail revenue and the ongoing decline in letter volumes.
“The challenges facing the Postal Service are not modest in nature, but neither are they insurmountable,” said the Inspector General’s white paper.
“In order to remain financially solvent, the Postal Service will need to focus on generating additional revenue through increasing the revenue yield of its traditional products where the market forces and conditions will allow it, and diversifying into other areas of business,especially adjacent spaces like logistics and financial services.”
