Watchdog Praises Postmaster General DeJoy for First Quarter Net Gain

WASHINGTON, D.C. – Today, the United States Postal Service (USPS) announced a net gain of $318 million, after recording 14 years of quarterly and annual net losses exceeding $80 billion. The partial reversal in financial fortunes reflects Postmaster General (PMG) Louis DeJoy’s cost-cutting operational changes, in addition to a holiday season with historically high mail volume. Despite the temporarily improved fiscal situation, the USPS still has more than $160 billion worth of unfunded liabilities and is expected to spend more than $6 billion on a new fleet of vehicles over the next ten years.

TPA President David Williams praised USPS management for the organization’s improved finances, noting, “when PMG DeJoy first put his network consolidation policies into effect, charges abounded of a conspiracy to ‘kneecap’ the USPS and destroy the agency. Instead, changes such as eliminating excess mail sorting machines and collection boxes have improved agency finances and resulted in a leaner and lower-cost postal operations. Unfortunately, courts and pressure from lawmakers have prevented the USPS from fully implementing operational changes including overtime reforms that would cut down on late, unnecessary trips. Congress and the judiciary should ensure that America’s mail carrier has all the tools at its disposal to continue delivering to consumers across the country without breaking the bank.”

Williams continued: “While first quarter financial figures are encouraging, the USPS certainly isn’t out of the woods. The struggling agency has more than $160 billion worth of debt and unfunded liabilities and can certainly run out of cash within the year absent critical reforms. The USPS, Congress, and the Biden administration need to work together to ensure that the USPS is able to keep labor expenses and resulting delivery costs under control. The agency can do its part to lower costs by expanding private contracting options and more rigorously auditing its existing middle-mile delivery contracts. In addition, the Biden administration should allow the USPS to carefully evaluate competing bids for new mail trucks rather than forcing the agency to opt for an all-electric fleet.”

“Pricing remains another critical part of postal reform. While the agency has temporarily managed to cash in on historically high holiday deliveries, the continued underpricing of packages is cause for concern. Unless package pricing formulas are transparent and take into account delivery costs, any revenue gains from packages will be fleeting.”

Williams concluded: “The improved finances is certainly cause for celebration. But, we cannot let down our guard. The agency direly needs cost-cutting reforms, and management must continue to work toward a faster, and leaner USPS.”

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 Taxpayers Protection Alliance (TPA) is a rapid response non-profit, non-partisan organization dedicated to educating the public through the research, analysis and dissemination of information on the government’s effects on the economy.