About four-fifths of the USPS labor force is unionized. The U.S. Seventh, and finally, postal operating costs tend to go up because collective bargaining always produces agreements that raise compensation costs. AFP and its logo are registered trademarks. So it’s your books of stamps, flat-rate boxes, packing and shipping materials, and even the adorable greeting cards they offer at checkout that keeps their operations running. The memes resurfaced in April 2020 as a bill in the House of Representatives proposed to forgive the agency’s debt as part of a stimulus package aimed at mitigating the economic fallout associated with the COVID-19 pandemic. Clearing this misconception up is the number one item on their Top Thirteen Things You Should Know about the U.S. US Postal Service trucks sit outside the Annapolis, Maryland distribution unit on January 29, 2009 (AFP / Jim Watson), Screenshot of a Facebook post taken on April 14, 2020, Screenshot of the USPS annual financial statement for 2019. “The USPS is not in debt. Privitization and Competition Excluding those debt payments, it should be noted, the USPS has finished each year with revenue surpluses for most of the past decade—as a 2018 Trump administration report documented. The USPS has always been self-sustaining,” the posts claim. Postal Service page. As CNN reports, the USPS told Congress it would be out of money by September back in April of 2020. The largest liabilities are unfunded retiree health benefits, worker compensation costs, and debt. Its official statement is, “The Postal Service receives NO tax dollars for operating expenses and relies on the sale of postage, products and services to fund its operations.”. Public debt already is $24 trillion, so the public is not terribly harmed by assuming this additional debt — especially if it helps stave off the collapse of the USPS. The only silver lining is that the loss was below the red-ink tsunami of $15.9 billion in 2012. The United States Postal Service will play a critical role in the 2020 election. All rights reserved. Public debt already is … Postal Service lost money in six out of the 10 years from 2001 through 2010, according to its financial reports. But its depleted cash reserve and new leadership have some worried. Users can access and consult this website and use the share features available for personal, private, and non-commercial purposes. But perhaps the biggest reason for financial troubles is the USPS' retirement funding. “But with COVID-19 our financial situation has gotten even worse,” he added, pointing out that USPS’s most profitable revenue stream, First-Class Mail, is hurt by businesses’ grinding to a halt because of the pandemic. The Postal Service’s 2019 annual financial report shows that the agency had a net loss of $8.8 billion that fiscal year, bringing total liabilities to more than $97 billion. (AP Photo) The United States Postal Service (USPS) lost $5.5 billion last year. However the posts misrepresented the financial health of the USPS in 2013, 2018, and 2020. “The prefunding requirement in the 2006 law is a major reason for our financial situation,” USPS spokesman David Partenheimer told AFP by email in reference to a bill that forces the institution to set aside money for its employees’ pensions before they are due. There’s been a lot of buzz surrounding the United States Postal Service lately, from the speed of mail delivery to the uncertainty of its future. In 2006, Congress forced the Postal Service to prepay health benefits and pensions for … Pope Moyush. Postal Service's (USPS) deteriorating financial condition is unsustainable as a result of trends including:Declining mail volume : First-Class Mail—USPS's most profitable product—continues to decline in volume as communications and payments migrate to electronic alternatives. Copyright AFP 2017-2020. While there are many factors that led to the USPS’ current state of debt, there are two primary reasons why that debt has now balloomed. 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Even in the digital age, physical postage is still a vital service.Many small businesses depend on the USPS, but reports indicate that the agency may be dying.Entering 2020, the postal service had $160 billion in outstanding debt, and it has been hit hard by the coronavirus pandemic. The GAO said it returned the USPS to its “high-risk list” a few years ago because it was projected to lose $7 billion but actually lost $8.5 billion in fiscal year 2010. The US mail employs 630,000 people overall. The Postal Service’s $15 billion debt is a direct result of the mandate that it must pay about $5.6 billion a year for 10 years to prefund the retiree healthcare plan. Stay tuned for more on the future of the USPS during this unprecedented time. Just wipe the books clean, because paying these debts is draining the Post Office’s cash, which should be invested in new delivery vehicles and overdue capital upgrades. This requirement has deprived the Postal Service of the opportunity to invest in capital projects and research and development. No assistance was given, however, and the USPS is surviving off of its remaining cash reserves and a $3 billion loan from the US Treasury, placing it further in debt. It is true that the Postal Service is constitutionally guaranteed. The USPS is not losing money.” These two statements, along with other assertions about the agency, were shared in various posts entitled “Facts You Should Know” or “USPS Fun Facts.” This post was shared 147,000 times since 2013, while these two from 2018 have more than 100,000 shares combined. Even before the novel coronavirus struck, impacting people and businesses across the country and around the world, the USPS was in serious financial trouble. The Fairness Act passed in the House of Representatives in February 2020, and a Senate vote is pending. So, yes, the USPS ha piled up billions of dollars in “debt” ON PAPER since 2006. The USPS tracking system is very transparent throughout the process; however, it does not show the exact location of the parcel for several reasons. Postal workers receive federal benefits, but are not actually considered federal employees. Claim: The U.S. economic downturn due to the COVID-19 coronavirus pandemic in early 2020 was forcing the United States Postal Service to close. The USPS continues to have no problem paying its operating expenses, including its retirees’ health benefits, WITHOUT any taxpayer funds. With a probable mail-in ballot voting system set for this election year, the pressure is on to settle financial unrest and questions of whether the postal service will be equipped to handle the process. A dispute between Congress and the Trump administration over funding to help the United States Postal Service (USPS) through the novel coronavirus led tens of … According to Partenheimer, USPS currently employs 97,000 military veterans, making it “one of the largest employers of veterans in the country.”. The subject matter depicted or included via links within the Fact Checking content is provided to the extent necessary for correct understanding of the verification of the information concerned. But actually, the post office isn't funded by tax dollars. The United States Postal Service (USPS), Oliver explained on Sunday’s episode, has been a “Republican punching bag” for years. That accounts for virtually all of USPS debt since 2006, when USPS was debt free. Despite partial deferrals from Congress and the proposed USPS Fairness Act to eliminate pre-funded health benefits, the agency has accrued a reported whopping $120 billion in pension and other post-employment unfunded liabilities. The first stamps were issued in 1847, and city delivery got its start in 1863. Postmaster Louis DeJoy has been invited to testify in front of the House Oversight Committee “in a sign of congressional concern over the possibility of delays.”, The testimony was reportedly requested "to examine recent changes to U.S. Under the mandate, they were on the hook to pay between $5.5 and $5.8 billion a year, and postal losses mounted. Its expenses are also growing faster than its revenue because of increased wages, a decrease in mail volume, and something known as pre-funded healthcare — a hot topic within the postal community. “The USPS costs taxpayers exactly $0. The Postal Service’s debt “is a direct result of the mandate that it must … pre-fund the retiree health plan,” the USPS Inspector General wrote in 2015. The Postal Service is in dire financial straits because its revenues are insufficient to support its operational costs and liabilities. As of now, the funding is still hanging in the balance. Expenses are a few billion a year higher than revenues. Postal Service has an existential problem. Come 2012, it had hit its $15 billion legal debt cap [11]. Postal Service (USPS) to achieve sustainable financial viability.”, “USPS has lost $69 billion over the past 11 fiscal years — including $3.9 billion in fiscal year 2018. The Postal Service has racked up $160.9 billion in debt from what’s owed prepaying retiree benefits. As the ninth state ratified the Constitution in 1788, Congress was granted the power “to establish Post Offices and post Roads.”. In 2006, the Postal Accountability and Enhancement Act (PAEA) ordered the USPS to pre-fund employee retiree health benefits for the next 75 years. The novel coronavirus will increase the agency’s debt by $22 billion over the next 18 months, Postmaster General Megan Brennan said in an April 10 statement. It’s a common assumption that the USPS is a federal agency, and its 7.3 million workers are federal employees. He said the Postal Service is more than $160 billion in debt. In April, the post office requested $75 billion in emergency funding to continue processing and delivering some 48 percent of the world’s mail. The U.S. Post Office owes $100 Billion in benefits to its workers/retirees but doesn’t have the money. 5. The U.S. Government Accountability Office (GAO) calls the post office’s financial viability a high-risk issue, saying, “Comprehensive legislative reform and additional cost-cutting measures are needed for the U.S. Figure 4: USPS debt has spiked ($1B) [10] The Postal Service had no debt in 2005. USPS assets are falling and liabilities are soaring. 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. Following the Postmaster General’s April 10 statement on USPS’s dwindling finances, social media users have urged their peers to save the institution by buying sheets of stamps. USPS’s total unfunded liabilities and debt ($143 billion at the end of fiscal year 2018) have grown to double its annual revenue.”. Post office is n't funded by Congress issued in 1847, and a Senate vote pending! 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