USPS’s Promised Business Plan: More than 100 Days Late and Counting
October 18, 2019
In a hearing on April 30, the American people were promised a 10-year business plan by Postmaster General Megan Brennan to outline steps toward financial stability for the United States Postal Service (USPS). Brennan said the plan was in final review by the board and would be submitted to the committee in 60 days, establishing a July 1st deadline. Summer has come and gone, and Postmaster General Brennan is stepping down from her perch. But hundreds of millions of taxpayers and USPS consumers are still waiting to see this long-anticipated plan. New USPS leadership must reassure the millions of Americans in limbo that they will soon see a plan that will hopefully allow the Postal Service to rise from the fiscal ashes.
It’s now been 108 days and counting since the USPS’s promised delivery date of their new business plan. And since Brennan promised a plan back in April, matters have taken a turn for the worse. The agency posted a devastating third quarter loss of $2.3 billion in August, bringing USPS losses to roughly $70 billion since 2007. These mounting losses should make the agency all the more eager to publish their business plan and provide the American people with a glimmer of financial hope.
Based on a preliminary draft of the plan presented to lawmakers and “stakeholders” in July, taxpayers and consumers already have a vague idea of the direction the agency wants to take. For example, employees would be required to increase contributions to their retirement plans, a welcome move considering the mammoth pension liabilities plaguing the USPS. But far more than labor cost reforms are required in a multifaceted approach to get the agency back into the black.
As Lexington Institute senior fellow Paul Steidler recently pointed out, the agency has failed to update their core mission amidst a changing America that increasingly prioritizes email over letter mail delivery. The agency still brings in more than $8 billion in revenue on over 17 billion pieces of “single-piece letters and cards” (i.e. that letter to your dear auntie), but these figures are declining every year. The USPS has tried to tread water by raising stamp prices every year, but a recent federal court ruling casts doubt on whether the agency can continue to bilk snail mail senders. Meanwhile, large e-commerce companies continue to use bizarre USPS pricing formulas to their advantage while jumping ship and building out their own logistical networks.
Faced with these business pressures on all sides, the agency needs to focus on the cost side of their operations. The Taxpayers Protection Alliance (TPA’s) 2019 report on USPS spelled out a number of proposed changes that could save the agency more than $3 billion per year by curbing inefficiencies and increasing oversight. For instance, the agency could consistently use their scheduling tools to assign projects to their 500,000 strong workforce and utilize procurement best practices for purchasing new vehicles. No one reform would be a silver bullet, but combined, the USPS could take a large leap toward securing their finances.
In order to maintain the services on which so many Americans rely, the USPS must address their ongoing financial crisis and take the necessary steps to remedy the agency’s flawed operating approach.
The USPS should take a play from their own book and aim for a prompt delivery of their business plan. New USPS leadership must ensure they are doing everything in their power to avoid leaving taxpayers to foot the bill for systemic agency failures.