The post office has been operating without any taxpayer money since. On April 24, President Trump threatened to block an emergency federal loan for the U.S. Is this the route you would take? “It would be unwise to allow this to continue,” he said. For the first three months of 2018, the US Postal Service reported a $1.3 billion loss, up from $562 million a year ago. The solution, O’Rourke says, would involve three steps: “First, repeal the pre-funding mandate and use the accumulated reserves to fund future pay-as-you-go costs,” he said. “The current agreement with Amazon, and presumably other online merchants, is, at the very least, a break-even arrangement. The basic issue is that revenue is growing more slowly than expenses. The U.S. a congressionally mandated retirement healthcare funding program that no other government agency is required to observe. The Postal Service was considering a host of cost-saving measures including the closure of as many as 3,700 facilities, the elimination of wasteful spending on travel, the end of Saturday mail and cutting delivery to just three days a week. The funding requirement, as it currently stands, contributes significantly to postal losses.". The agency blamed the losses on the recession that began in December 2007 and significant declines in mail volume as a result of changes in the way Americans communicate in the age of the Internet. The U.S. And third, provide Medicare for future USPS retirees. “Based on a number of briefings and warnings this week about a critical fall-off in mail across the country, it has become clear that the Postal Service will not survive the summer without immediate help from Congress and the White House. The reason the postal service is losing money is because of a congressionally mandated retirement healthcare funding program that no other government agency is required to observe. But, according to James O’Rourke, professor of management at the University of Notre Dame’s Mendoza College of Business, the postal service’s money troubles have little to do with low prices and much more to do with a stifling congressional mandate. THEY LOSE A FORTUNE, and this will be changed.\" “At a time when America needs the Postal Service more than ever, the reason we are so needed is having a devastating effect on our business,” Brennan said in a statement.. “The Postal Service relies on the sale of postal products and services to fund our operations, and these sales are … COVID-19 Pandemic Threatens Postal Service Survival. Although the Postal Service lost money in the early part of the decade, in 2001 and 2003, the most significant losses came after the passage of a 2006 law requiring the agency to refund retiree health benefits. Listen Now. Already burdened by a negative net worth of $65 billion and an additional $140 billion in unfunded liabilities, the USPS originally expected to run out of liquidity by 2021 without help from Congress. $2.7 billion in 2017. Is the post office just screwed up over retirement benefits or are they so bad at business they need to fail? This was not regular mail, but certified with a return receipt and the shortage was on the certified fee. Is the post office making or losing money delivering Amazon packages? The Mail is Arriving Way too Late, Watchdog Reports, Mail Delivery Could be Even Slower Than USPS Admits, Code of Ethics for United States Government Service, History of the United States Postal Service, How the Votes Are Counted on Election Day, Living Past 90 in America is No Decade at the Beach, Congressional Oversight and the US Government, Postal Accountability and Enhancement Act of 2006, Find Postal Service Jobs Without Being Scammed. Not only do many of these restrictions not make sense, they directly undermine the success of the USPS. Though the Postal Service is bleeding money, it receives no tax dollars for operating expenses and relies on the sale of postage, products, and services to fund its operations. No Wonder the Post Office Is Losing Money! why is the post office losing money 2020; 07 Jan. why is the post office losing money 2020. This creates a $6.5 billion annual shortfall that could easily be avoided.”. According to the Times, the real financial problem facing the Post Office may have been created by Congress in the first place through the 2006 Postal Accountability and Enhancement Act. However, without unreasonably burdensome restrictions, it would likely be a different story. Second, adopt generally accepted accounting principles to determine postal service liabilities. ThoughtCo, Aug. 27, 2020, thoughtco.com/postal-service-losses-by-year-3321043. WASHINGTON, Aug 11 (Reuters) - The U.S. USPS just hired FedEx to haul mail for it for the next seven years... for $10.5 billion. This is a small box going from Western Wa. The Postal Service said it had made "significant cost reductions in areas within its control" by 2011 but claimed it needed Congress to approve several other measures to boost its financial outlook. The law required the service to begin prefunding the healthcare benefits of future retirees 50 years in advance. To avert bankruptcy, the post office has defaulted on the multibillion-dollar health prepayments each year since 2012. “It’s part of their model. By the end of the decade, the semi-independent government agency's losses had reached a record $8.5 billion, forcing the Postal Service to consider seeking an increase in its $15 billion debt ceiling or face insolvency. Nearly every for-profit business in this country does exactly that. Postal Service (USPS) had largely completed Post Office Structure Plan's (POStPlan) implementation prior to a 2014 POStPlan arbitration decision and expected millions in cost savings. This was not regular mail, but certified with a return receipt and the shortage was on the certified fee. By Elvina Nawaguna. https://www.thoughtco.com/postal-service-losses-by-year-3321043 Postal Service continued to bleed money during its second quarter, despite an increase in package revenues and an emergency price hike that took effect in January. I freaking HATE shipping through the post office! Murse, Tom. The Postal Service's finances have long been in sorry shape, in part because of a requirement that the agency pre-fund the future retirement benefits of its employees. By Letter to the Editor. Share Now on: Facebook; Twitter; … (2020, August 27). “Also, covering a $6.5 billion shortfall with a four-fold increase in parcel post would essentially close down that class of service. The Post Office Lost $2 Billion In Just 3 Months. Many would have us do away with the Postal Service altogether. Postal Service unless it raised shipping prices for online retailers. Even though folks don't write letters much anymore and many pay bills online, they buy more online more than ever - so delivery is even more in demand. “That reserve now has about $47 billion on deposit. So why is the agency losing money? “Amazon is going to pay for the post office,” Trump said. Evidently they changed the rate from $2.80 to $2.85 and, in typical U.S. Evidently they changed the rate from $2.80 to $2.85 and, in typical U.S. Is End of Saturday Mail Delivery Such a Good Idea? Here's the president yesterday at a White House meeting. Wonder why the post office is losing money. Notre Dame, IN 46556 USA, Postal Service losing money because of congressional mandate not low prices, expert says. They cannot make it up with higher-priced stamps.”, Contact: James O'Rourke, James.S.ORourke.2@nd.edu, Copyright © 2021 Reema Khrais and Sabri Ben-Achour Apr 2, 2018. It reported a $2.7 billion net loss in 2017. "Why Does the US Postal Service Lose Money?" University of Notre Dame, Notre Dame News “The Trump administration is mistaken about its claim that the postal service is losing money ‘every time they hand out a package for Amazon and other Internet companies,’” O’Rourke said. to Alberta. In April 2020, lawmakers warned that losses related the novel coronavirus COVID-19 flu pandemic could threaten the Postal Service’s very existence. God only kn (SOUNDBITE OF ARCHIVED RECORDING) PRESIDENT DONALD TRUMP: The post office is losing billions of dollars, and … Naturally, the post office is not exempt from that impact, and it didn’t take long to feel its effects. As I entered my office this morning, there sat a returned letter from the post office with $.05 postage due. The problem is that Congress refuses to let it raise more money, refuses to let it spend less money… Murse, Tom. But O’Rourke says, at the encouragement of the president, Congress created this problem on their own. The Post Office has broad limitations about making routine business decisions that its private-sector competitors do not. By Letter to the Editor. There is much criticism of the Postal Service for losing money. USPS just hired FedEx to haul mail for it for the next seven years... for $10.5 billion. Tom Murse is a former political reporter and current Managing Editor of daily paper "LNP," and weekly political paper "The Caucus," both published by LNP Media in Lancaster, Pennsylvania. Those measures include eliminating mandated retiree health benefit pre-payments; forcing the federal government to return Civil Service Retirement System and Federal Employee Retirement System overpayments to the Postal Service and allowing the Postal Service to determine the frequency of mail delivery. “The postal service is a joke,” Trump told reporters in the Oval Office. The first one that comes to mind is — you guessed it — the coronavirus pandemic. Claim: The United States Postal Service (USPS) is losing money due to a 2006 law mandating it fund its pensions 75 years in advance. However, with fewer people and businesses because of the COVID-19 outbreak, the quasi-governmental Postal Service—which relies on user fees rather than taxes—could be forced to close its doors as early as June 2020, lawmakers warned. Claim: \"Only fools, or worse, are saying that our money losing Post Office makes money with Amazon. Under the Postal Accountability and Enhancement Act of 2006, the USPS is required to pay $5.4 billion to $5.8 billion annually, through 2016, to pay for future retiree health benefits. “These negative effects could be even more dire in rural areas, where millions of Americans are sheltering in place and rely on the Postal Service to deliver essential staples,” the lawmakers warned. “The Postal Service needs America's help, and we must answer this call,” said leaders of the Committee on Oversight and Reform. 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