PMG Brennan’s full statement before the House Committee – 4-30-2019

Good Morning Mr. Chairman, Ranking Member Jordan and Members of the Committee. Thank you for calling this hearing, to discuss the need for timely and comprehensive postal reform legislation.

I am pleased to represent the more than 630,000 hard-working and dedicated men and women of the United States Postal Service. These men and women play an integral role in every region, community and neighborhood in our nation, every day.


When I last came before this Committee in 2017, I described the serious, but solvable, challenges facing the Postal Service, and the urgent need for legislative and regulatory postal reform. Since that time, our financial condition has only worsened.

Total mail volume has dropped from 154 billion pieces in 2016 to 146 billion in 2018, a 5 percent decrease overall. First-Class Mail, our most profitable product, has fared much worse, dropping by 7.4 percent. Although our package business continues to grow, it has become increasingly competitive and the growth rate is half what it was, dropping from 13.7 percent in 2016 to 6.8 percent in 2018, compared to the prior year. In quarter one of 2019, the rate of package volume growth dropped even further, to 5.4 percent. These combined factors are deepening our financial challenges.

In 2018, we posted a net loss of $3.9 billion — the 12th consecutive annual net loss we have incurred. These losses are occurring despite aggressive Postal Service management actions to right-size our organization, amounting to $13.4 billion in annual savings. These losses have forced us to default on legally-mandated retiree health benefits (RHB) prefunding payments since 2012 and additional pension prefunding payments due to the Office of Personnel Management (OPM) in 2017 and 2018. These actions will be addressed in more detail later in my testimony.

The most significant point I can highlight today is the increasing need for urgent action. Had reform legislation been enacted two years ago, we estimate that we would have earned an additional $1 billion in revenue from a modest one-time price increase and saved between $5 billion and $6 billion in RHB costs.

The losses from these missed opportunities can never be recovered. In short, it’s time to stop digging a deeper financial hole. Putting off action on postal reform legislation will make resolving our financial crisis not only more complex, but also more difficult to achieve due to the nature of the changes that will become necessary to fix the problem


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