The 112 th Congress is considering additional major postal reforms, including reductions in service, expansion of the USPS's authority to provide products and services, and alterations to the postal employees pension and healthcare plans. Were it not for congressional action to reduce a statutorily required payment to the USPS's Retirees Health Benefits Fund (RHBF), the USPS would have lost an additional $9.5 billion. As the USPS's finances have deteriorated, its ability to absorb operating losses has been diminished. Since FY2005, the USPS's debt has risen to $13 billion from $0, $2 billion below its maximum statutory borrowing authority (39 U.S.C. These deficits are particularly problematic because Congress designed the USPS to be self-supporting (P.L. The USPS's Efforts to Improve Its Financial Condition

To help stem its losses, the USPS has taken a number of steps. Foremost, the Postal Service has downsized its workforce through attrition. Since FY2006, the number of career postal workers has shrunk 21.9%, to about 544,000 from 696,138. Postal Reform Legislation in the 112th Congress

Numerous postal reform bills have been introduced in the 112 th Congress. 2309 and S. 1789 have progressed the furthest toward enactment. 2309 , the Postal Reform Act of 2011, on June 23, 2011. 2309 with amendments on January 17, 2012 ( H.Rept. The House Rules Committee reported H.R. 2309 on March 29, 2012 ( H.Rept. The Senate passed S. 1789 amended by a vote of 62-37 on April 25, 2012. H.R. The authority also could authorize the Postmaster General to consult with postal employee unions to revise its workers compensation program to move injured employees of retirement age onto retirement benefits (Section 311); immediately transfer to the USPS the $11 billion FERS overpayment (Section 306); control the long-term growth of the USPS's employee compensation costs by (1) lowering the USPS's FEHB and Federal Employee Group Life Insurance (FEGLI) contributions and (2) changing collective bargaining by requiring arbitrators to consider the USPS's financial condition, defining USPS employee compensation to include all benefits, abolishing the requirement that USPS maintain employee fringe benefits not less than those provided in 1970, and requiring the USPS and unions to adopt reductions-in-force (RIF) procedures (Sections 301-305); gradually increase the postage rates for some mail classes that the USPS carries at a loss (Sections 401-403); end all annual appropriations to the USPS (Section 409); and reduce the USPS's FY2011 RHBF payment (due in August 2012) from $5.5 billion to $1.0 billion, and increase the USPS's FY2015 and FY2016 RHBF payments by $2.25 billion each year (Section 410). At the time of writing this report, both the House and Senate FY2013 Financial Services and General Government (FSGG) bills and reports contain postal policy provisions. The agency has asked Congress to enact a variety of reforms to improve the USPS's financial condition. At present, the USPS appears to be suffering from both a short-term liquidity crisis (i.e., dwindling cash and borrowing authority) and a long-term structural deficit (i.e., stagnating revenues and rising overhead costs). Assuming Congress wants to maintain the present USPS model —addressing these financial challenges will require (1) improving the USPS's liquidity immediately; (2) fortifying USPS's long-term revenues; and (3) controlling the growth of USPS's long-term costs, all while (4) having USPS continue to provide universal postal service to the public. 2309 and S. 1789 . As Table 3 indicates, both H.R. 2309 and S. 1789 contain provisions intended to make progress toward each of these four goals. However, H.R. And it would appear that H.R.
Since FY2007, the U.S. Postal Service (USPS) has lost more than $25 billion. Were it not for congressional action to reduce and defer statutorily required retiree health benefits, the USPS would have lost an additional $9.5 billion. As the USPS's finances have deteriorated, its ability to absorb operating losses has been diminished. The USPS's current debt is $13 billion, $2 billion below its maximum statutory borrowing authority. The agency owes $11.1 billion in payments to the Retiree Health Benefits Fund by September 20, 2012, and it currently has less than $1 billion in cash. These deficits are particularly problematic since Congress designed the Postal Service to be self-supporting in 1970 and enacted significant postal reforms in 2006.
To help stem its losses, the USPS has taken a number of steps. Foremost, the Postal Service has downsized its workforce through attrition. Since FY2006, the number of career postal workers has shrunk 21.9%, to about 544,000 from 696,138. However, the USPS has said it is unable to return to solvency through its own actions, and it has asked Congress to enact major reforms.
Numerous postal reform bills have been introduced in the 112th Congress; House and Senate appropriators and President Barack H. Obama also have advanced postal proposals. Among postal authorizing legislation, H.R. 2309 and S. 1789 have progressed the furthest toward enactment. The Senate passed S. 1789, the 21st Century Postal Service Act, on April 27, 2012. The House Committee on Oversight and Government Reform reported H.R. 2309, the Postal Reform Act of 2011, on January 17, 2012, and the House Rules Committee reported H.R. 2309 on March 29, 2012. Both bills include major reforms, such as reductions in service, expansion of the USPS's authority to provide products and services, and alterations to the postal employees pension and healthcare plans.
At present, the USPS appears to be suffering from both a short-term liquidity crisis (i.e., dwindling cash and borrowing authority) and a long-term structural deficit (i.e., stagnating revenues and rising overhead costs). To address both of these financial challenges, the USPS would have to (1) improve its liquidity immediately; (2) fortify its long-term revenues; and (3) control the growth of its long-term costs, all while (4) continuing to provide universal postal service to the public.
Both H.R. 2309 and S. 1789 contain provisions to make progress toward achieving each of these goals, albeit in different ways and to different degrees. H.R. 2309 would aim to reduce the USPS's costs through reducing the number of delivery and postal facilities and enacting a variety of USPS compensation reforms. S. 1789 would largely preserve present-day postal services and enact a number of incremental cost-cutting policies, such as reducing the USPS workers' compensation outlays.
This report will be updated after any further legislative action.