How to solve the USPS financial ‘death spiral’

The U.S. Postal Service has for years been unable to bring in enough revenue to offset annual costs, delaying infrastructure investments and defaulting on payments in order to make sure that its workforce is still paid and deliveries happen as scheduled.

Chris Edwards, director of tax policy studies at the Cato Institute, called the current trajectory for USPS a “death spiral” at an April 30 hearing before the House Committee on Oversight and Reform.

“Given the restraints imposed by law, no set of management actions is sufficient to offset the continuing decline in the use of mail,” said Postmaster General Megan Brennan.

“We cannot overcome systemic financial imbalances caused by business model constraints. Forcing the Postal Service to default on mandated payments in order to deliver the mail is an untenable public policy. Even if the Postal Service decides to continue with our current pattern of defaults, absent legislative and regulatory reforms, we are likely to run out of cash in 2024.


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