Will the USPS Go Broke in Five Years?

Just how bad are things at the USPS? According to the news out of Washington, the Postal Service just reported a massive $2.1 billion net loss for Q2 of this year. To put that into perspective, that’s half of the entire $3.9 billion loss for 2018.

And Congress wants to know what they plan to do about it.

“Following pressure from lawmakers at a House Oversight and Reform Committee hearing last month, the Postal Service has shed more light on a strategic plan aimed to outline a long-term business model for USPS,” writes Jory Heckman in Federal News Network.

“Postmaster General Megan Brennan, in a call with reporters Friday, said the 10-year plan would address some of the same sustainability questions that have also been raised by a White House postal task force, which released its final recommendations last December,” Heckman continues.

According to Brennan, in order to be effective, the plan must go beyond the numbers and include public policy discussions of what the organization should provide and how to make it happen.

“We have no illusions — tough decisions will be necessary,” Brennan said. “We additionally anticipate that a significant effort will be necessary to build consensus and support among our various postal stakeholders.”

“Ultimately, the question is, what’s the role for your government-sponsored Postal Service in a 21st-century marketplace, and how are you going to fund it? So that’s a broad public policy discussion that we will continue to have with our public officials as well as other postal stakeholders,” Brennan said.

The USPS seems to have traveled beyond the financial crisis and is smack into an existential crisis, questioning its very reason for being and how it should approach a future that is radically different from the past they were set up to operate in. Throw in a Congress that’s politically divided to the point of lunacy, and some unattainable pre-funding mandates for future retirees, and you have one giant mess.

Heckman does a good job of breaking down the challenges, and his entire article is worth a read. But this one line about the pre-funding mandates stopped me cold.

“… Brennan warned lawmakers at last month’s committee hearing that USPS would run out of money by 2024 if it made all of its legally mandated payments.”

With a massively constrained business model, there is some real doubt whether the Postal Service can raise itself out of this morass. It’s almost dystopian to imagine a near-future where the mail simply doesn’t get through.