Financial Challenges Facing the U.S. Since the passage of the PRA, the USPS has generated nearly all of its funding—about $69 billion in FY2015 according to the USPS's most recent financial report—by charging users of the mail for the costs of the services it provides. Between FY2007 and FY2015, the USPS accumulated $56.8 billion in financial losses, including a net loss of $5.1 billion in FY2015. In its 2010 exigent request, the USPS sought to increase rates on its market dominant products by approximately 5.6% due to poor economic conditions and decreased mail volume. Expenses from Operations

To address its financial challenges, the USPS has made several operational adjustments intended to align its revenue, mail volume, and operating expenses, including 
changes to its workforce (e.g., increased use of non-career employees); consolidation of delivery routes and reductions in number of delivery facilities; reductions to retail office hours; and realignment of its mail processing and distribution network. The current labor and employment challenges of the USPS are discussed in greater detail in the " Current Issues Facing the USPS Workforce " section of this report. The USPS attributes the increased costs to "contractually obligated salary escalations and additional work hours associated in part with the growth in the more labor-intensive Shipping and Packages business." Additionally, the USPS reached its statutory debt limit of $15 billion in FY2012 and as a result the USPS has no remaining flexibility to finance operations or respond to market changes through borrowing without further action from Congress. Prefunding Requirement for Retiree Health Benefits64

The PAEA requires the USPS to prefund its retiree health benefits. To accomplish this task, the PAEA established a prefunding schedule beginning in FY2007. In total, through FY2015 the USPS has contributed $20.9 billion to the RHBF and has defaulted on payments totaling $28.1 billion. Postal Service's Current Strategies and Initiatives

This section provides information on the U.S. Below is a selected list of the proposals contained in the USPS Business Plan : 
continued consolidation of mail processing facilities (known as the Network Rationalization Initiative); full implementation of revised postal service delivery standards; adjustments to staffing and the means of providing products and services at retail locations, including increases in "self-service" kiosks and reduced hours at selected retail locations; a shift to centralized and curbside mail delivery for both business and residential customers, where appropriate; an expanded scope of products and services offered at retail locations; and a move to five-day delivery of mail while maintaining six-day delivery of packages. Further, legislation introduced in the 114 th Congress, such as S. 2051 , Improving Postal Operations, Service, and Transparency Act of 2015 (iPOST Act), and H.R. 5714 , Postal Service Reform Act of 2016 , includes provisions that would allow the USPS to offer a range of nonpostal products and services that are currently prohibited under the PAEA. This approach would provide limited growth opportunities, but would also incur relatively low implementation costs and is permissible under current statutory authority.
This report provides background information on the responsibilities, financial challenges, and workforce issues facing the U.S. Postal Service (USPS). Additionally, it covers the current strategies and initiatives under development by the USPS and discusses further options for postal reforms.
In FY2015, the USPS marked its ninth consecutive year of financial losses with a net loss of $5.1 billion. In addition, the USPS has reached its statutory debt limit of $15 billion. In recent years, the USPS has experienced growth in the package and shipping part of its business (known as Competitive Products). The USPS, however, has experienced sharp declines in both volume and revenue of its Market Dominant Products (e.g., First Class single-piece mail).
The USPS has struggled in recent years to fulfill its statutory obligation to prefund its health benefits liability for future postal retirees. Under a prefunding schedule established by the Postal Accountability and Enhancement Act, the USPS has made $20.9 billion in contributions since FY2007 but defaulted on its remaining $28.1 billion in payments. In its most recent financial statement, the USPS requested reforms that would integrate postal employee healthcare options with Medicare, thereby reducing costs and making the prefunding liability expense more manageable. Such reforms would require statutory authorization from Congress.
This report also covers several issues facing the USPS workforce. In recent years, initiatives designed to restructure the USPS retail and mail processing networks allowed the USPS to implement several workforce reduction strategies that helped cut costs. In FY2015, however, workforce costs increased. According to the USPS, this reversal was due to contract obligations and work hours associated with the growth in its labor-intensive package and shipping business.
Additional postal initiatives and reform options discussed in this report include (1) changes to postal delivery standards, (2) consolidation of mail processing facilities, (3) closure of retail post offices, (4) five-day delivery, (5) updates to the postal fleet, (6) nonpostal products and services; and (7) postal banking.
Appendix B of this report includes a table of House and Senate postal reform legislation introduced in the 113th and 114th Congresses, such as S. 2051, Improving Postal Operations, Service, and Transparency Act of 2015 (iPOST Act), and H.R. 5714, Postal Service Reform Act of 2016.
For each bill, the table in Appendix B provides the bill number, title, sponsor, the committee(s) to which the bill was referred, a list of selected issues the bill covers, and the last major action (e.g., referral to committee, markup held).