The United States Postal Service (USPS) is a self-supporting agency of the U.S. government, headed by the 11-member Postal Board of Governors. Appointees serve 7-year terms. The Postal Board has been plagued by vacancies in recent years, and was last fully staffed in 2010.
The last time Congress substantially changed postal law was in 2006, when it passed the Postal Accountability and Enhancement Act, or PAEA. PAEA transformed the Postal Rate Commission into the Postal Regulatory Commission (PRC), increasing its authority to regulate the USPS above and beyond rates. The law charged the PRC with recommending changes for the USPS to Congress every five years. Beyond this, the PRC engages in rulemaking typical of federal regulators. Most PRC rules are product price changes, but the agency also regulates things like the USPS’ internal accounting and compliance with PAEA finance rules.
The USPS Office of the Inspector General (OIG) is the part of the PRC most relevant to everyday Americans. The OIG polices the USPS workforce, conducting audits and documenting the agency’s compliance with postal law. The OIG is charged with ensuring workplace accountability for the approximately half-million USPS employees.
The USPS’ financial condition has gradually deteriorated since letter volumes peaked in 2001. While packages have made up some of the difference, the decline of letters and increasing number of delivery points have forced the Service to nearly max out its credit line with the treasury. Bureau of Labor Statistics data shows that productivity at the USPS has fallen while labor costs have increased in the decade since PAEA passed.
Retiree health and pension benefit obligations continue to grow each year. Postal retiree savings are locked by law in extra-low-risk special-purpose treasury bonds, a portfolio more conservative than the typical federal employee. With a declining primary product, rigid and increasing long-run costs and a legal mandate to not lose money, Congress will be forced to change postal law at some point or else cede postal regulation to bankruptcy courts.
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