Postal Reform [Updated December 12, 2002]   [open pdf - 67KB]

From the Summary: "Although its short-term financial prospects have suddenly brightened by discovery that retirement obligations are less burdensome than presumed, the U.S. Postal Service (USPS) faces severe financial straits in the long term. Business use of the mails is declining as alternatives such as e-mail, faxes, and cell phones substitute for hard copy letters. Despite three rate increases in 18 months, USPS has lost well over $2 billion in the past two years, and is approaching its $15 billion debt limit to the Treasury. It has a negative net worth and mounting obligations for retiree health benefits. USPS would be bankrupt but for the fact that it is a government entity. USPS, its board of governors, GAO, and most mailers' organizations believe that the Postal Reorganization Act of 1970 no longer provides a viable business model. It is dependent on rising mail volume to cover the ever-increasing cost of arbitrated labor settlements and the addition of 1.7 million new delivery points each year, yet volume has begun to fall. The highly regulated process of setting rates is cumbersome and tendentious. At congressional request, USPS developed a 'Transformation Plan' that briefly considered, and rejected, the alternatives of privatization and a return to regular agency status with appropriations to cover the costs of universal service."

Report Number:
CRS Issue Brief for Congress, IB10104
Public Domain
Retrieved From:
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