The House Oversight and Reform Committee will try — again — this year to advance bipartisan reform for the U.S. Postal Service in 2019.
Why?
Because it has to, or else the Postal Service will run out of cash by 2024, Postmaster General Megan Brennan told Congress Tuesday.
“Absent legislation and regulatory reform, in all probability, we’ll be out of cash in 2024,” she told the House Oversight and Reform Committee at a hearing on the USPS’ financial status. “That will threaten our ability to meet our obligation to the American public and to our business partners.”
The U.S. Postal Service has been careening toward financial ruin for the past several years.
The Postal Service has suffered $69 billion in net losses over the last decade. Total mail volume has dropped 31 percent and first class mail has fallen 41 percent since 2007.
Unlike nearly every other government agency, USPS is required to pre-fund health benefits for postal retirees. This mandate accounts for 80 percent of those losses, Brennan said. The Postal Service has defaulted on $48 billion in these mandatory payments since 2012 to conserve cash.
If USPS made all of these legally mandated payments in 2019, it will be out of cash in 2020, Brennan said.
In fiscal 2018, the USPS had about $200 million of cash on hand for about two months on any given day. Ideally, Brennan said her agency should have $20 billion in cash on hand for about 100 days.