Over the last five years the U.S. Postal Service has run up deficits totaling $36.6 billion. Those costs will eventually fall on the taxpayer.
Congress has deplored this situation and pressed the USPS to balance its budget.
But in a bizarre development, congressional inaction is going to cost the Post Office another $2 billion a year in losses because a much-needed temporary increase in the first class postage rate to 49 cents expired on April 10. Now first-class stamps will cost 47 cents each.
So rush out and buy stamps now, and don’t expect another stamp-price decrease anytime soon. The last time it happened was in 1919, with the expiration of World War I wartime postage rates.
Part of the economic hole the Postal Service has fallen into came from large revenue losses during and after the Great Recession. The 49-cent first class rate was designed by Congress as an answer, though it fell short of restoring needed revenues and has now expired.
But the main reason the USPS still runs a deficit is a requirement that Congress imposed a decade ago for it to make annual forward payments against future pension costs.
The most recent figure cited for this payment, $5.7 billion in 2015, is actually larger than the Post Office deficit for the year.
In other words, without the forward payment, the Postal Service could be in the black for the first time in a decade.
For at least the last four years Congress has been considering legislation to remove this burden and make other changes in employee benefits that would put the USPS back on its fiscal feet. The major changes have been blessed by, among others, the main Postal Service workers’ unions, representing between them 600,000 employees.
Yet year after year postal reform legislation languishes.
The senseless two-cent cut in the first-class postage rate and the threatened future decline in postal services due to growing debt are a result.
Many lawmakers have expressed bipartisan support for legislation to put the Postal Service back on its feet, improve its competitiveness against other delivery services and retain key public services such as Saturday delivery and service in rural areas.
Yet still no bill has received a green light for debate and adoption.
And more needless delay of postal-reform delivery risks rising costs far above the revenue lost by the stamp-price cut.