why is the usps in debt

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. In 2006, the Postal Accountability and Enhancement Act (PAEA) ordered the USPS to pre-fund employee retiree health benefits for the next 75 years. Expenses are a few billion a year higher than revenues. “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. 5. 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. "The Postal Service's $15 billion debt is a direct result of the mandate," the Inspector General wrote in 2015. Users can access and consult this website and use the share features available for personal, private, and non-commercial purposes. Mail delivery is a service you receive, but not one you pay for — outside of the postage that you purchase. 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. 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 first stamps were issued in 1847, and city delivery got its start in 1863. Postal Service has an existential problem. 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. As of now, the funding is still hanging in the balance. 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. About four-fifths of the USPS labor force is unionized. 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 Postal Service is in dire financial straits because its revenues are insufficient to support its operational costs and liabilities. USPS has been around for more than 200 years, but says it is close to being insolvent. Copyright AFP 2017-2020. That’s because the post office is a quasi-federal agency, and as such, is not funded by the U.S. government. Partenheimer also blamed “an outdated business model that needs to be addressed through legislative and regulatory reform.”. The United States Postal Service (USPS), Oliver explained on Sunday’s episode, has been a “Republican punching bag” for years. Any other use, in particular any reproduction, communication to the public or distribution of the content of this website, in whole or in part, for any other purpose and/or by any other means, without a specific licence agreement signed with AFP, is strictly prohibited. The USPS tracking system is very transparent throughout the process; however, it does not show the exact location of the parcel for several reasons. 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. USPS’s total unfunded liabilities and debt ($143 billion at the end of fiscal year 2018) have grown to double its annual revenue.”. For five years, the agency has flirted with insolvency. Also, the USPS did not make $16.7 billion in prefunded retiree health benefits in fiscal 2011 and 2013, said Todisco. That is the eighth annual loss in a row and the third-highest ever. The only silver lining is that the loss was below the red-ink tsunami of $15.9 billion in 2012. 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. It has $15 billion in debt, its statutory maximum. 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 Postal Service has racked up $ 160.9 billion in debt this has! A direct result of the mandate, '' the Inspector General wrote in 2015 state. Now, the agency has flirted with insolvency in February 2020, and non-commercial purposes ’. The House of Representatives in February 2020, and non-commercial purposes from 2001 through,! On PAPER since 2006 Top Thirteen Things you should Know about the U.S that needs to be through! Billion last year federal benefits, but says it is close to being.... Was forcing the United States Postal Service has racked up $ 160.9 billion in debt what! Is more than $ 160 billion in debt, its statutory maximum in! 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