R Street Institute policy study: The U.S. Postal Service’s financial condition is breaking our hearts
Originally intended to be financially self-sufficient, reoccurring deficits caused by decreasing mail volume, $15 million in debt, and $100 billion in unfunded pensions and retiree health benefits have created a precarious situation for the USPS. While it is not all doom and gloom – the USPS’s cash holdings are enough to continue operations for the foreseeable future – the agency must face a number of significant challenges in order to adapt. Specifically, the USPS must face its struggle to turn profits, the stark contrast between the agency’s liquidity and debt, and the significant financial risks that jeopardize its capacity to cover annual operating costs.
While not immediately on the edge of crisis, the USPS is struggling to fund itself. Kosar notes, “its viability as a self-funding entity is uncertain, at best.” Adding, “if the agency is unable to adapt, Congress will need to step in to avert a public bailout.”