The United States Postal Service (USPS) will run out of cash in five years. Postmaster General Megan Brennan shared this information in testimony before the House Oversight and Reform Committee earlier this month. The immediate consequence of USPS becoming insolvent would be that the world’s largest postal system — which moves 150 billion mail pieces per year, or 412 million pieces per day — would be completely dead. This is something that has never occurred in the Postal Service’s long and storied history.
That means that more than half a million postal workers would be without wages. Kevin Kosar wrote for The Hill: “Magazine companies, which send millions of glossies per month, would be stuck trying to find local deliverers. Retailers — particularly those that sell via catalogs — would see their main advertising medium vanish. The paper and printing companies they work with would see their revenues plunge. Prescription drug deliveries would be disrupted as sellers scrambled to find alternate means for delivery. Jury summons, voting materials (including ballots for overseas troops), and international mail and shipments would stop flowing.”
During the hearing where Brennan spoke, Rep. Mark Meadows (R-N.C.) demanded USPS produce a turnaround plan by July that would save the Postal Service. The agency’s current plan has consisted of trying to trim costs, mostly by reducing the hours worked by employees, and reaping more revenue by delivering more parcels. But Postmaster General Brennan noted in her testimony, these efforts have not solved the problem.
USPS is in threatening financial straits because its revenues are insufficient to support its operational costs and long-term liabilities. Mail volume is down 31 percent since 2007, and the agency’s revenues ($72 billion per year) are the same as they were a decade ago.
Doing something about the problem has proved exceptionally difficult. Certainly, Congress has tried to solve it — many times, in fact. But postal policymaking is tricky because postal politics is complex. Unionized postal employees would rather not have their compensation cut or more of their work outsourced to the private sector.
Finding a sweet spot between these diverse demands is not easy. The challenge is made all the more difficult by the voices who continue to deny the fact of the Postal Service’s financial crisis. Postmaster General Brennan’s testimony makes clear what has been obvious for years: The Postal Service is facing an existential crisis.