The Tough Options Facing the Postal Service

The financial losses for the Postal Service continue to grow, totaling nearly $118 billion since FY 2006. USPS temporarily paused contributing to its employees’ pension plan to conserve cash. Unfortunately, there’s no single solution that will right the Postal Service’s fiscal ship. It will take a combination of tough decisions to make a bottom-line difference, likely impacting most, if not all, postal stakeholders. 

Our new white paper, Options for Addressing the U.S. Postal Service’s Financial Gap, explores fifteen different revenue-generating and cost-saving options that can lessen the losses and promote the long-term viability of the Postal Service. While the paper does not endorse any of the options but rather presents them for further discussion, it classifies them under five strategic goals:

• Growing operating revenue
• Obtaining government funding
• Making changes to the workforce
• Enacting benefits reform
• Reducing operational costs

While all of the options will move the financial needle, the ultimate solution could involve combining a number of the options. To that end, the paper constructs four potential scenarios for addressing the financial gap, each combining different options and requiring different levels of public funding:

• Maintaining Service with Substantial Government Funding
• Reducing Controllable Costs, with Government Action on Uncontrollable Costs
• Reducing Service with Minimal Public Funding
• Maintaining Financial Self-Sustainability with Substantial Cuts to Service

The paper notes that any option, or combination of options, will have an impact on the Postal Service’s mission and operating model. In fact, the most consequential action would be no action at all; as growing financial pressures could force more drastic measures in the future. You can read the paper in its entirety here. Also, if you are short on time, our interactive summary will give you a high-level overview of the options we presented. If you are interested in taking a deeper dive into Postal Service financial data, check out our USPS Deeper Dive dashboard.

Which options would you choose to address the Postal Service’s financial gap?