Following USPS’ $9.5 Billion Loss for 2024, Keep US Posted Emphasizes the Delivering for America Plan’s Failure & Says that without USPS SERVES US Act, USPS is Headed for a Taxpayer-Funded Bailout
WASHINGTON, D.C. (December 9, 2024)— Keep US Posted — a nonprofit advocacy group of consumers, nonprofits, newspapers, greeting card publishers, magazines, catalogs, forestry and recycling interests, and small businesses — was invited to submit comments for tomorrow’s U.S. House Committee on Oversight and Accountability hearing on the U.S. Postal Service. Postmaster General Louis DeJoy will testify at the hearing, which begins tomorrow (Tuesday, December 10) at 10 a.m. and will be live-streamed here: https://oversight.house.gov/hearing/oversight-of-the-u-s-postal-service/. Tomorrow’s hearing follows USPS’ announcement of a $9.5 billion loss for fiscal year 2024, continuing a trend of losses prompted by the continued pursuit of the Delivering for America plan, which favors packages over traditional mail — even though traditional mail is the largest revenue-generator for USPS and is depended upon as the only courier able to serve every American.
The Keep US Posted comments — submitted by its Executive Director Kevin Yoder, a former Republican congressman from Kansas — highlight several issues that threaten the viability of USPS and its ability to serve Americans, and encourage members of Congress to support (and reintroduce in 2025) new postal reform legislation, The USPS SERVES US Act (H.R. 9839) as an alternative to a taxpayer bailout of USPS.
“Not only does our nation need and depend on mail services — especially because USPS is the only courier able (and mandated to reach) every address across the country, but we also recognize that the mailing services USPS is tasked with providing strongly depend on a healthy customer base and an affordable and reliable USPS,” Yoder writes in his comments. “Unfortunately, due to USPS mismanagement — and chiefly its continued pursuit of the Delivering for America Plan (DFA) — the future of USPS and its customer base is in peril. Neither the bipartisan Postal Reform Act of 2022 — which resolved $120 billion in USPS liabilities — nor the millions in COVID relief funding provided by Congress prevented USPS from delivering unprecedented and exorbitant twice-a-year rate increases, poor service, and excessive cost overruns — all despite the intention of the Postal Reform Act of 2022 to fiscally stabilize USPS and prevent the need for excessive rate hikes, which have been occurring twice each year since 2021 — something which is unprecedented throughout the Postal Service’s nearly 250-year history.”
Yoder continued in his comments, “Given the recent trajectory, allowing USPS to accumulate additional debt will greatly increase the risk that taxpayers will eventually be asked to save the Postal Service. USPS has had three years to pursue DFA, and the results speak for themselves. To continue down the same path will invite continued failure … The USPS SERVES US Act (H.R. 9839) addresses this crisis by giving the Postal Regulatory Commission (PRC) the necessary mandate and power to hold USPS accountable. Currently, the PRC, by its own admission, lacks the statutory authority to do what is necessary to stop destructive rate hikes, and as recently as this spring permitted a huge July rate increase that it admitted was ‘not prudent….and not in the best interests of stakeholders.’ This is a warning to Congress that changes are needed to ensure the PRC can do the job it was created to do.
“H.R. 9839 contains provisions to ensure efficiency improvements, service quality and volume retention. It creates an autonomous Office of Customer Advocate to give customers, especially small businesses, a dedicated point of contact and representative in proceedings, and it allows USPS to invest its assets in better performing private index funds. These provisions have broad support from the USPS customer base and have been carefully crafted to give the PRC the clarity and authority it needs to address these challenges on a consistent, expert, and bipartisan basis.
“I urge the Committee to take up this bill in the new Congress. USPS cannot be permitted to continue down its current path. Thus far, it has shown no indication it will do anything differently unless changes are made to its governance structure. Failure to act will leave USPS with too few customers to support its bloated obligations, thus leaving Congress to choose between substantial reductions in service or a costly taxpayer bailout. This outcome will not benefit USPS, its customers, or its employees.”
The USPS SERVES US Act (H.R. 9839) is an alternative to a taxpayer bailout of USPS. It contains the following key reforms:
Holds USPS accountable for improving efficiency by imposing an X-factor reducing rate authority if productivity is not improved each year.
Prohibits the PRC from creating a rate system with no price cap.
Holds USPS accountable for service performance by reducing rate authority if it fails to meet established service targets.
Makes the PRC’s nature of service evaluations binding decisions, not just advisory opinions.
Limits rate increase to once per year.
Limits the imposition of “underwater surcharges” if service performance and cost efficiency are not maintained for the relevant products.
Requires the PRC to apply each objective for rate setting in every proceeding.
Creates a new volume-encouraging objective for evaluating rate increases.
Establishes an autonomous Office of Customer Advocate within the PRC to represent monopoly customer concerns with the power to initiate proceedings on their behalf.
Streamlines the PRC’s consideration of complaints.
Empowers the PRC to reduce rates for affected parties if it finds a rate is unlawful.
Requires the PRC to develop its own volume estimation model independent of USPS.
Requires arbitrators in USPS-Union contract disputes to consider the financial health of USPS.
Enables USPS to invest retirement assets in private index funds such as those used by the Thrift Savings Fund.
