PRC Acting Chairman Taub Outlines USPS Challenges in Testimony to House Committee

PRC Acting Chairman Taub Outlines USPS Challenges in Testimony to House Committee

Postal Regulatory Commission

5/11/16 Washington, DC – Acting Chairman Robert G. Taub testified before the U.S. House Oversight and Government Reform Committee at a hearing on May 11, 2016, titled “Reforming the Postal Service: Finding a Viable Solution.” During his testimony, Taub outlined the Commission’s analysis of the various challenges that contribute to the Postal Service’s current financial condition. The Acting Chairman concluded his presentation by asking, “Where can we look for answers? I would argue that the starting point is to look at ourselves. What do we as a Nation need from a postal and delivery system and what is its cost? What exactly is universal mail service in the United States?”

Acting Chairman Taub pointed out a number of issues that have impeded the Postal Service’s efforts to stabilize its financial position. “The fundamental problem is that the Postal Service cannot currently generate sufficient funds to cover its mandated expenses and also invest in critically deferred capital needs,” he said. However, he also underscored that “there is still strength in the system,” and detailed the critical role that the 240-year-old Postal Service provides to the Nation. “Despite the very serious and real financial problems, let’s also keep in mind the good news – the strength in the system – and take some degree of hope knowing that this is the foundation that Congress and the Administration can build upon to find solutions,” he added.

The Acting Chairman’s testimony focused on the following areas:

  • Losses since 2007 have negatively impacted liquidity, and, as a result, impede the Postal Service’s ability to make critical capital investments in infrastructure
  • The Postal Service’s inability to make required payments to the retiree health benefit fund has skewed its liabilities in relation to its assets
  • The historic decline in total mail volume
  • The increase in revenue from Competitive products is insufficient to offset the future revenue loss from removal of a temporary surcharge
  • The Postal Service is an essential part of the Nation’s infrastructure and a significant driver of the economy
  • The need to better define the universal service obligation and its cost
  • The Commission’s upcoming 10-year rate review scheduled to commence December 2016

The Acting Chairman also referenced an upcoming Commission report to the President and Congress where the Commission will evaluate the operation of the changes made by the Postal Accountability and Enhancement Act of 2006 and make recommendations for any legislation or other measures necessary to improve the effectiveness and efficiency of our Nation’s postal laws. The Acting Chairman said the Commission will issue those recommendations later this year.

For a copy of Acting Chairman Taub’s full testimony, click on the following link: Acting Chairman Taub House Testimony.