PRC recommends the President and Congress address financial condition of USPS

11/14/2016 Washington, DC – The Postal Regulatory Commission (Commission) today made its recommendations to the President and Congress to address the volatile financial condition of the U.S. Postal Service. The Commission is required every five years under Section 701 of the Postal Accountability and Enhancement Act of 2006 (PAEA) to issue a report that evaluates how well the PAEA is operating and makes recommendations for legislation or other measures necessary to improve the effectiveness and efficiency of the Nation’s postal laws.


The Commission’s 2016 Report emphasizes the starkly different environment faced by the Postal Service since the enactment of the PAEA – a time when volume was growing and the Postal Service was earning revenues that exceeded costs. Today, mail volume has declined more than 25 percent since 2006 coupled with a total net loss of $5.1 billion in fiscal year 2015, despite an exigent surcharge that generated an additional $2.1 billion in revenue.

Twice this year, the Commission was invited to provide testimony at congressional hearings focused on the steadily deteriorating financial condition of the U.S. Postal Service. Specifically, the Commission was asked to share with the Senate and House oversight committees key findings of its annual Financial Analysis of U.S. Postal Service Financial Results. Testimony delivered by Acting Chairman Robert Taub described the fundamental problems facing the Postal Service: a growing liability for retiree health benefits; an inability to borrow for needed capital investments, such as new delivery vehicles and package sortation equipment; and the continued loss of high margin First-Class Mail revenues.

Acting Chairman Taub said, “It is clear, the most important legislative recommendations the Commission can make relate directly to improving the financial condition of the U.S. Postal Service. It is our hope that these recommendations will be the foundation for that effort.”

The Commission emphasizes the following recommendations that address the financial condition:

  • The Commission renews its recommendations from its 2011 Report that Congress modify the Retiree Health Benefits Fund prefunding level and payment schedule as a measure to improve Postal Service sustainability. Decreasing the funding target to one more in line with industry norms would provide much needed improvement in the Postal Service’s assets to liabilities ratio.
  • The Commission recommends lengthening the amortization period of the current unfunded liability. The current amortization period is 40 years. Extending the amortization period would free significant capital by reducing Postal Service annual payments.
  • Further improvement in liquidity could be provided by allowing the Postal Service to use any available Federal Employees Retirement System (FERS) surplus, rather than requiring the surplus to be transferred to the RHBF. The Commission, therefore, recommends that Congress grant the Postal Service the authority to use available FERS surpluses to pay off current or future liabilities, including debt to the U.S. Treasury, pension liabilities, and retiree health benefit liabilities.

In addition to these suggested financial changes to the law, all of the Commission’s recommendations are located in Appendix A of the Section 701 Report titled “Section 701 Report Recommendations.”


4 thoughts on “PRC recommends the President and Congress address financial condition of USPS

  1. wtodd- the tax payer doesn’t pay for the cost of farm crop insurance….. the individual farmer does….. I should know- I’m a farmer too. Farmers also haven’t gotten farm price subsidizes in years. And be careful about the farmer stuff- anything that a farmer has ever gotten from the government has allowed the price of food to stay affordable. Without it, mega farms would set your prices you pay at the grocery store, and believe me you wouldn’t like it. There are also caps set from the subsidizes that prevent the mega farms from lining their pockets and the expense of the smaller farms.

  2. The PRC should made the statement that the Postal Service should not be required to pre pay health care costs while no one else in America is required to ! It is in fact just a political decision, nothing more! Some say the public shouldn’t subsidize the Postal Service’s health care costs. Then why must tax payers subsidize American business? Businessmen pay as little as possible, while the tax payer pays for the earned income tax credit. pays the cost of welfare. Pays the cost of food stamps. Pays for the cost of Medicaid. Pays for the cost of farm price subsidizes. Pays for the cost of farm crop insurance. Pays for the cost of FEMA. And pays for all the wealthfare that businessmen suck from the tax payers! As we see, it is the businessmen that are subsidized by the American suckers! Why not require businessmen to be self reliant, not suck off the tax payer?

Comments are closed.