Postal Service revenues jump during pandemic, despite warnings of massive losses, insolvency
After pleading for $25 billion from Congress to cover projected coronavirus losses, USPS sees revenues during pandemic jump $330 million over same period last year.
The Facts Inside Our Reporter’s Notebook
Coronavirus may have become a boom rather than a budget-buster for the U.S. Postal Service.
New figures show Postal Service revenue turned out to be a lot higher than the agency predicted during the first three months of the coronavirus crisis.
The agency even bested its revenue from the same time period in 2019. That's according to data from the Postal Service, as reported Monday by several Republican members of Congress.
Rep. Jim Jordan (R-Ohio), Rep. Jody Hice (R-Ga.), and Senator Ron Johnson (R-Wis.) say the new information about Postal Service revenue undercuts the agency’s earlier appeal for taxpayer bailout money. They're asking the Postal Service to re-crunch their request.
“This conflicts starkly with the picture the agency painted at the beginning of the U.S. outbreak, which it has used to justify its requests for a multibillion-dollar taxpayer bailout,” reads a letter from the lawmakers.
Less than two months ago, the Postal Service was telling Congress it would "run out of cash" by the end of September if it did not get massive financial assistance.
On April 10, the Postal Service asked Congress for $25 billion to cover COVID-19 related losses. In addition, the agency projected it would lose $13 billion more from April through the end of October, and $10 billion in 2021 — all due to coronavirus. The agency also asked for $25 billion for modernization and $14 billion in debt relief.
Instead of suffering massive losses, in the first eleven weeks of the COVID-19 crisis, Postal Service revenue was more than $330 million higher than the same period in 2019.
In their letter to Postmaster General Margaret Brennan, the members of Congress write, “[Postal Service] revenues were down initially, but they have since recovered dramatically due to an increase in package volume that is apparently rivaling volumes leading up to Christmas”
According to the letter, the Postal Service started the coronavirus crisis with $9.2 billion in cash. As of June 4, it had $13.2 billion. “While USPS availed itself of $3.4 billion in additional cash through short-term notes on April 3, even without those notes, USPS’s cash position has improved by at least $600 million,” reads the letter.
Republicans have long asked the Postal Service to develop a business plan to make the agency solvent. In April of last year, Postmaster General Brennan told Congress such a plan was being finalized and would be delivered within about 45 days, but that never happened.
The increased revenue during the first three months of the coronavirus disaster doesn’t mean the USPS is out of the woods when it comes to money problems. At the end of the 2019 fiscal year, the agency’s unfunded liabilities and debt were at $161 billion. That’s more than double its annual revenue.
What to do about it has become a political football. President Trump has called the Postal Service “a joke,” criticizing its business practices and saying the administration would not support a bailout unless the agency agrees to make reforms and labor concessions.
Democrats have largely taken the side of the USPS and large retail operators such as Amazon that count on the Postal Service to deliver packages at low cost. They favor providing billions in direct funding to the Postal Service without requiring reforms.
In late March, Carolyn Maloney (D-N.Y.) and Rep. Gerald Connolly (D-Virginia) said $25 billion in emergency funding was needed to avoid an “economic collapse” of the Postal Service. “The Postal Service, which every American relies on for prescription drugs, care packages, and critical services, is in crisis and must be addressed,” said Connolly.
According to the Government Accountability Office, net losses at the Postal Service totaled approximately $78 billion from fiscal years 2007-2019.
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