US Postal Service on “Death Spiral” Without Urgent Reform: Boss


© Reuters. FILE PHOTO: A USPS postman walks past the New York Stock Exchange in New York


By David Shepardson

WASHINGTON (Reuters) – U.S. Postmaster General Louis DeJoy told lawmakers that the U.S. postal system is losing $ 10 billion annually and is in dire need of reform and congressional relief.

“I would suggest we find ourselves in a death spiral,” DeJoy told the House of Representatives Oversight and Government Reform Committee on Wednesday, which did not rule out changing world-class delivery standards or other significant changes.

DeJoy, a supporter of former President Donald Trump, who was named head of the postal service last year, suspended operational changes in August after heavy criticism of postal delays. He plans to release a new 10 year strategy break-even plan soon.

Delays in paychecks and other mail deliveries by the Postal Service (USPS) attracted attention this summer when a record number of voters were sent on ballot papers to elect a new president.

House Oversight and Government Reform Committee Chair Carolyn Maloney spoke out in favor of action as the USPS faces falling volumes of first-class mail, increased costs for employee compensation and benefits, and higher unfunded liabilities and debt.

The new Chairman of the Postal Committee, Ron Bloom, who said the USPS is currently expected to lose $ 160 billion over the next decade, told lawmakers, “We can’t just throw money on the problem. We have to address the systemic problems that plague his obsolete model. ”

The USPS reported net losses of $ 86.7 billion from 2007 to 2020. One reason for this is the 2006 legislation that required more than $ 120 billion to be pre-funded for retiree health and retirement obligations.

Maloney has distributed bills on a number of USPS financial issues, such as: B. To remove the requirement to pre-fund retirees’ health benefits and to require postal workers to sign up for the Medicare Retiree Health Insurance plan to save $ 40 billion to $ 50 billion over 10 years. “The postal service is facing a difficult financial situation that we must act on,” she said.

DeJoy said the reform bill alone “does not solve the problem”. He also turned down calls by some Democrats to resign and swear that he “will stay long. Get used to it”.

Bloom said the USPS would ask the Biden administration to use “modern actuarial principles” to calculate pension obligations in order to save another $ 12 billion.

Mark Dimondstein, president of the American Postal Workers Union, called on Congress to give the USPS an additional $ 15 billion and called for a separate “modernization grant” of $ 25 billion.

In December, Congress converted a $ 10 billion loan to the USPS into a grant.

Some Democrats want President Joe Biden to lay off the current post office. There are three board vacancies that the White House has promised to fill soon.

Disclaimer: Fusion Media would like to remind you that the information contained on this website is not necessarily real-time or accurate. All CFDs (stocks, indices, futures) and Forex prices are not provided by exchanges, but by market makers. As a result, prices may not be accurate and may differ from the actual market price. This means that the prices are indicative and not suitable for trading purposes. Therefore, Fusion Media is not responsible for any trading losses you may suffer from using this data.

Fusion Media or anyone involved with Fusion Media assumes no liability for any loss or damage caused by reliance on the information contained on this website, such as data, offers, charts and buy / sell signals. Please be fully informed about the risks and costs associated with trading in the financial markets. This is one of the riskiest forms of investment possible.

Comments are closed.