For five years, the agency has flirted with insolvency. During the fourth quarter of 2018, the Governors of the Postal Service made a decision to reduce the organization's debt level to reduce interest rate costs and to better reflect actual borrowing needs. Pre-funding prevented the agency from investing in capital projects, research and development, or other initiatives to improve the post office’s finances and logistics even before the recession. But this simple joy may soon be a thing of the past, given that the United States Postal Service (USPS) is chronically in debt and in danger of being disbanded entirely. So far, the USPS has paid $20.9 billion but it's also deferred on some $47.2 billion as of September 2019. Postal Service. He said the Postal Service is more than $160 billion in … Congress sets postal rates, not the Post Office, so something as simple as the price of a stamp becomes political. However, under almost any definition or understanding of debt and losing money, this is false. Some actions can be taken by U.S. citizens, while other changes are things that Congress and other government leaders must make. So, yes, the USPS ha piled up billions of dollars in “debt” ON PAPER since 2006. That will, presumably, rise to about $24 billion in debt after the Cares Act loan. The debt-laden mail service will provide the agency proprietary information on its agreements with private-sector competitors. Government agencies would also suffer from increased delivery costs, which would rise for things like Social Security payments, voter information, census information, jury duty notifications and more. Postal Service is the core of the $1.4 trillion mailing industry that employs more than 7.5 million people. Postal Service (USPS) recently closed its books for the 2019 fiscal year, and things aren’t looking so good as it heads into 2020. What Features Does Infinite Campus Offer for Students? The USPS is the second-largest employer in the United States after Wal-Mart. The Postal Service recently announced its Fiscal Year 2017 finances (its fiscal years end September 30), and once again it revealed significant financial problems, including a $2.7 billion net loss. The Postal Accountability and Enhancement Act (PAEA) required the USPS to create a $72 billion fund to pay for the cost of its post-retirement health care costs, 75 years into the future. 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. Postal Service is the core of the $1.4 trillion mailing industry that employs more than 7.5 million people. This is a bizarre claim, and since it’s not sourced it can’t be known exactly how this conclusion was reached. 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 Postal Service, which employs 650,000 people, is asking for $75 billion in aid from the government, and, according to The New York Times, another $14 billion to pay off debt related to a retirement benefits program ― a whopping $89 billion total. 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. Erik Sherman Senior Contributor. USPS’s total unfunded liabilities and debt ($143 billion at the end of fiscal year 2018) have grown to double its annual revenue. However, that’s not the only factor behind the organization’s current troubles. Photo Courtesy: Jeff Greenberg/Getty Images, Photo Courtesy: Spencer Platt/Getty Images, Postal Accountability and Enhancement Act. The U.S. How did we get here? 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 also includes some outstanding debt. “USPS has lost $69 billion over the past 11 fiscal years — including $3.9 billion in fiscal year 2018. The federal government was in debt to the USPS. When most people think of the Postal Service, they think of letters from grandma or junk mail. Medications are often delivered through the USPS, so people in rural areas could find themselves unable to afford essential medications. Sixth, the Treasury should forgive the USPS’ present debt, which is around $10 billion. Postal Service lost money in six out of the 10 years from 2001 through 2010, according to its financial reports. By the end of the decade, the semi-independent government agency 's losses had reached a record $8.5 billion , forcing the Postal Service to consider seeking an increase in its $15 billion debt ceiling or face insolvency . August 11, 2020 02:47 PM. "The Postal Service's $15 billion debt is a direct result of the mandate," the Inspector General wrote in 2015. Postal Service continued to spend itself into debt by losing $540 million in the first quarter of 2018, according to a fiscal report Friday. The U.S. Usually, those benefits are paid as they're used. How the USPS Got Into This Position 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. 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. At the end of 2019, the GAO calculated that the Postal Service had $160.9 billion in debt, $119.3 billion of which came from retiree benefits. The Postal Service Retiree Health Benefit Fund (PSRHBF) is a USPS-specific fund, and its 10-K report specifies that it uses the “aggregate entry age normal acturarial cost method.” That is the eighth annual loss in a row and the third-highest ever. Nearly half a million people would lose their jobs if the USPS went under. Postal Service (USPS) crates sit on the floor at the Brookland Post Office in Washington, D.C., U.S. No customer data was stolen in a recent data breach, USPS officials say. Without the USPS, private carriers would become even more expensive. This reduction allows the Postal Service to continue to reduce interest costs. USPS Going Postal with Enormous Debt. That's about how long the postal service has faced declining mail volumes and a growing mountain of debt. 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