usps debt 2019

Whether the 116th Congress will take up postal reform is far from clear. The only silver lining is that the loss was below the red-ink tsunami of $15.9 billion in 2012. You don’t require full funding in advance, including pensions for people who haven’t been born, let alone hired, unless you want to make it difficult to run the organization. Postal Service (USPS) will receive a $10 billion line of credit under the U.S. Senate’s $2.1 trillion coronavirus economic relief legislation passed late on the evening of March 25, disappointing those who hoped USPS would receive as much as $25 billion in direct aid and the forgiveness of $11 billion in debt. USPS’s Credit Line Is Nearly Tapped ($Billions), USPS is a massive enterprise. Ultimately, much of it comes down to a scheme that was a subsidy for the Department of Defense—responsible, by the way, for 18% of all on-budget spending in the 2019 fiscal year. USPS has lost $69 billion over the past 11 fiscal years—including $3.9 billion in fiscal year 2018. Chart 4. If you were lucky enough these days to have a real pension and moved from Company A to Company B, the pension benefits at B wouldn’t be a continuation of those at A. The Postal Service has reported its financial results for fiscal 2019’s third quarter (April 1-June 30). On a typical day, our 634,000 employees physically deliver 493 million mail pieces to 159 million delivery points.”. The agency’s retiree health benefits are in a far more concerning condition. Congress turned the Post Office Department into the U.S. 1212 New York Ave. The U.S. Would Stimulus Payments Have Been Bigger If Trump And Democrats Called Them Tax Relief? Given that the postal service had been a major employer of veterans, that effectively means transferring a significant financial burden from the Department of Defense to the USPS, according to Rubio. Only Congress can rescue the agency. Through FY 2019, the USPS’s operating deficit was nearly $75 billion and, according to the Government Accountability Office (GAO), has long-term unfunded liabilities of $161 billion. The USPS, as of 2019, has 469,934 career employees and 136,174 non-career employees. That means all pension obligations including those from when the person was in the military and not a postal worker. USPS’s Costs Regularly Outstrip Its Revenues ($Billions). Source: Government Accountability Office, “Unsustainable Finances Need to Be Addressed,” GAO-18-602. All Rights Reserved, This is a BETA experience. The new USPS still had to provide uniform service and pricing. USPS’s Retiree Health Benefits Will Go Bankrupt. Trump 2019 budget proposes numerous USPS changes Feb 16, 2018, 4 AM President Trump’s proposed 2019 budget recommends ending six-days-a-week mail delivery, potentially idling United States postal vehicles on Saturdays. The U.S. The Postal Service was designed to be a self-funding agency. Even this was minor, though, in comparison to the treatment by elected officials who saddled the agency with “debt and financial disadvantage,” according to an email exchange I had with Philip F. Rubio, a former USPS letter carrier and now a professor of history at North Carolina A&T State University. Washington Postal Scene by Bill McAllister. Source: Government Accountability Office, Continuing Financial Challenges and the Need for Postal Reform, GAO-16-651T. The Postal Service, unfortunately, has been at or near its credit limit for years, and much of that borrowing went to cover ongoing operating costs. Net income or loss from ... restructuring of short-term debt to long-term debt in FY 2019 led to a $3.1 billion decrease in current liabilities, the only such decrease since FY 2010. Even though Trump’s allies sold the voter fraud conceit to him to explain his loss of the popular vote in 2016, the issues the USPS faces are far older and deeper than the current tsuris. To understand the postal system’s dire financial straits takes some history. Postal Service (USPS) currently owes $99.8 billion in benefit payments to its current and retired workers but does not have the money, and if Congress does not act to fix the problem, the Postal Service may have to “implement contingency plans to ensure that mail delivery continues,” according to a new report by the Government Accountability Office (GAO). For the convenience of timekeepers, each biweekly pay period appears as two separate weeks, with the beginning and ending dates indicated for each week. These funded liabilities represent several different items, including unfunded liabilities for pension benefits, health benefits, and outstanding debt. $70.6 B. Virginia Incumbent Attorney General Seeks Reelection, Skips Governor’s Race. Total revenue was $17.1 billion, essentially flat from the same period one year earlier. “[T]he USPS was on the hook for the whole pension of any veteran who worked for it” because of the 2003 Pension Reform Act, Rubio wrote. The big example is pre-funding pensions, something that many have heard of at this point. Should You Save For College If President Biden Makes It Free? To be sure, some of that deficit is due to actuarial factor. Postal Service saw a slight increase in package volume for fiscal 2019, after its first quarterly decline in years during Q3, as the agency is being challenged by Amazon and FedEx rerouting packages to their own networks. ), Chart 2. USPS cut 4.3 million work hours in the last three quarters of fiscal 2019 through attrition and a reduction in overtime. The Postal Service reported a loss of $2.7 billion for the fiscal year that ended Sept. 30. This is false; the USPS had a net loss of $8.8 billion in 2019, and its total liabilities exceed $97 billion, according to official disclosures. Postal Service, to run as a self-supporting business. year 2019, the Postal Service recorded a net loss of $8 8 billion Revenues continue to be pressured by the ongoing erosion of mail volumes Because mail services account for nearly 63 percent of our revenues, this ongoing decline puts significant financial strain on the Brennan was referring to the mandated prefunding of retiree health benefits, a legacy of the 2006 Postal Reform Act which has been an albatross on the USPS ledger ever since. The U.S. Then the Great Recession of 2008 struck, and corporations—which send the vast majority of all mail—pulled back. During the quarter, three-to-five day on-time service dropped from 87.8% in 2019 to 72.1% in 2020. The agency is also carrying $11 billion in debt and has more than $120 billion in funded pension and health liabilities. The net loss for the year was $8.8 billion, an increase in net loss of $4.9 billion … Career employees* Feb 7, 2020, 10 AM The House of Representatives passed the legislation Feb. 5 with bipartisan support. The debt it carried jumped from $7 billion in 2008 to $10 billion in 2009. Unfortunately, losses are the rule rather than the exception for the agency. It couldn’t move beyond letter and package delivery, although at one point there was a postal banking system that helped low-income and rural people. For example, USPS’s workers’ compensation charge was $3.5 billion last year — much higher than usual due to a change in the way this expense is computed. 2021 AG Elections . (E.g., USPS must deliver to more addresses every year. United States Postal Service FY2019 Annual Report to Congress FY2019 Annual Report ... Debt $ 11,000$ 13,200$ 15,000(16.7)% (12.0)% ... year 2019, the Postal Service recorded a net loss of $8 8 billion Revenues continue to be pressured by the ongoing Luckily, the USPS has enough cash to make ends meet over the next few months. The following chart lists the 2019 pay periods. The agency has reduced its staff count, mostly by not replacing retirees, and has trimmed the number of post offices. This sounds like some screwy conspiracy theory. That is an immense sum, particularly for an organization that shows little capacity to generate the revenues required to fund itself. (Photo by Spencer Platt/Getty Images). The facts in this publication may be reproduced for the purpose of stating the fact itself, and in a business, informational, academic context and the like, and in the body of text discussing factual subject matter relevant to the fact being presented. If banks couldn’t be bothered with them, postal banking, with branches everywhere, was available. The agency has around $120 billion in unfunded debt and obligations, most of which flow from compensation and benefits owed to its significant cohort of employees and retirees. IT’S NOT THE INTERNET It’s a business network. According to Rubio: “Funds are instead being diverted [by Congress] to help pay down the national debt.” The federal government takes the pre-funding and then spends it elsewhere, because it can always cover pension obligations down the line. The burden will fall on the House’s Oversight and Government Reform Committee and the Senate’s Homeland Security Committee. Use our quick tools to find locations, calculate prices, look up a … Here are some highlights: • Revenue. As planned, the Postal Service reduced its debt level during 2019 by $2.2 billion, finishing the year with $11.0 billion in debt outstanding. It is very difficult to stay in business when costs exceed revenues. President Trump in recent weeks has called the Postal Service "a joke" as the agency is experiences delays in mail delivery due to the coronavirus pandemic and financial pressures. The United States Postal Service (USPS), the nation’s national mail carrier service, is under increased scrutiny from politicians who are warning that the agency is not prepared to handle the tens of millions of mail-in ballots which are expected to be sent for the November election. The agency added $7.3 billion in debt in fiscal 2019 related to the retiree … US National Debt Clock : Real Time U.S. National Debt Clock Instead, you’d start over. $67.8 B. USPS’s pension obligations remain about $21 billion short of full funding. Its delivery fleet, for example, was mostly manufactured between 1987 and 2001 [8], and is prone to breakdowns and expensive repairs. As previously reported, AG Herring will face … When you were, say, 25, would you expect in ten years to have put aside full retirement savings for yourself and your children and maybe even grandchildren? The Postal Service presently does have $10 billion in cash, so it certainly can minimally service its debt. $ 100 billion in debt and has not rebounded to run as a business. Serve all Americans, regardless of geography, at uniform price and quality of the century, USPS! 1 ] into the U.S 2014 2013 2012 usps debt 2019 ; annual operating revenue Johnson delivers mail in April year ended... Agency has reduced its staff count, mostly by not replacing retirees and. Its creation, the modern USPS was required to take on increased pension benefits, health,... Quarter, and corporations—which send the vast majority of all mail—pulled Back, faces an future! By the diminishing First-Class mail Service, which are mandatory April 1-June 30 ) 120 in! 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