GAO has called on Congress to take action on postal reform on the heels of a USPS announcement that it posted a $1.3 billion loss for the first quarter of the fiscal year despite growth in its package business and holiday season revenue.
USPS continues to incur unsustainable operating deficits, has not made required payments of $11.1 billion to pre-fund retiree health benefits, and has reached its $15 billion borrowing limit, GAO told the Senate Homeland Security and Governmental Affairs Committee during a hearing launching an effort to push postal reform in this Congress.
"Although the Postal Service has made some progress in trimming costs – which is welcome news — far more work remains to make its outdated business model financially viable long term," said the committee’s new chair, Tom Carper, D-Del. "Piecemeal efforts like those announced in recent days and months will not be enough to solve the Postal Service’s financial challenges for the long haul."
Carper was in part referring to USPS plans to eliminate Saturday delivery for most mail, among other efforts to consolidate its network and trim its workforce, none of which have resolved the structural problems which have caused and could continue to cause losses in the billions each quarter. The delivery schedule announcement drew praise from the chair of the House Oversight and Government Reform Committee chair as well. Rep. Darrell Issa, R-Calif., testified and indicated there is a favorable chance of reform legislation getting done.
GAO provided testimony in favor of proposals to modify USPS’s retiree health benefit payments, facilitate its ability to align costs with revenues based on changing workload and mail use, and require that any binding arbitration resulting from collective bargaining takes USPS’s financial condition into account.
