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The Questionable Financial Basis For The U.S. Postal Service’s Receipt Of $10 Billion From Taxpayers

August 19, 2022
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Former USPS Finance Executive

Following this, the Consolidated Appropriations Act, 2021, another major COVID-19 relief package signed into law on December 27, 2020, stated the Postal Service would not have to repay the funds if it met the criteria to obtain them as specified in the CARES Act. The remainder of this commentary is focused on the determination required of the Postal Service for access to CARES Act (taxpayer) funds, starting with brief coverage of two agreements with the U.S. Treasury, the second of which nullified the first.

In July 2020, Treasury and the Postal Service agreed to a CARES Act term sheet, which required the Postal Service’s cash balance to be $8 billion or less when receiving taxpayer funds. Reaching the $8 billion would have required cash to decline by almost $5 billion.

On January 19, 2021, the Postal Service reached a new CARES Act agreement with Treasury, which apparently did not contain a maximum cash balance for access to funds. Despite an adjusted $1.9 billion of net positive cash flows in-pandemic,[1] and an adjusted Postal Service Fund balance of $11.2 billion at the end of February, the Postal Service requested and received $8.7 billion from Treasury in March, in two transactions. The Postal Service accessed the remaining authorized $1.3 billion in at least two more transactions by the end of July. At the end of September 2021, the adjusted Postal Service Fund balance totaled $22.4 billion.

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