As expected, the USPS has posted a roughly $5 billion loss for fiscal 2011, and has warned that it will default on its obligation to prefund retiree health benefits with a $5.5 billion payment that was postponed, first until November 18 and more recently until December 16, to give Congress more time to weigh postal reform proposals.
The year-end loss would have been about $10.6 billion had Congress not allowed USPS to postpone its annual payment.
Mail volume overall continues to decline – from $34.2 billion in 2010 to $32.2 billion in 2011 – but USPS reported an increase in shipping service revenue by $530 million in 2011 that the agency says demonstrates that it can return to profitability if it has enough flexibility to offer new products and services and change or discontinue others.
Legislation that has cleared the Senate Homeland Security and Governmental Affairs Committee would provide USPS with increased flexibility over business and operational decisions – including moving to a five-day delivery schedule.
The bill, S-1789, which passed on a 9 to 1 vote, would allow the Postal Service to use about $7 billion in overpayments into the FERS retirement account to fund buyouts to help it reduce its workforce by about 220,000 employees. It thinks most of that target can be met through attrition.
It would also recalibrate the Postal Service’s obligation to prefund retiree health benefits by amortizing the payments over time.
A counterpart House bill differs in various ways, including a mandate to create a financial oversight body over USPS.