All federal pension and retirement benefits are paid from the U.S. Treasury. Today we have the flip side of that myth- the belief that the US Postal Service isn’t part of the federal government. The Postal Service Act, signed by U.S. president George Washington on February 20, 1792, established the department. Cost-cutting efforts at the USPS were already underway when DeJoy was sworn in as Postmaster General in June 2020. In fact, it existed, in some form, even before the United States came into existence. ... to catch up on the pre-funding of its retirement health benefit obligations after years of a … Postal workers receive federal benefits, but are not actually considered federal employees. Even before the novel coronavirus struck, impacting people and businesses across the country and around the world, the USPS was in serious financial trouble. GAO cites a deteriorating financial situation, insufficient cost savings, and unfavorable trends as the reasons behind the post office’s poor financial performance. 1-800-222-1811 (Track and Confirm a Package) TTY: 1-877-889-2457. The federal government conducted the last major analysis of its Charter Schools Program in 2015, when it said the program had provided $3.3 billion since its … As a result, USPS has missed $42.6 billion of required payments on its health benefits since 2010 and $5.6 billion in required contributions to its pension plan since 2014. As First-Class Mail volumes have declined, the USPS has been reducing the number of blue mailboxes for years. The Second Continental Congress appointed Benjamin Franklin as the first Postmaster General in 1775. In a Washington Post article on the U.S. Provisions of personal protective equipment to employees, a decrease in the ability to use air transportation for deliveries, increased paid sick leave, and low customer demand have all contributed to surging costs and declining revenues. Postal Service (USPS) had largely completed Post Office Structure Plan's (POStPlan) implementation prior to a 2014 POStPlan arbitration decision and expected millions in cost savings. Guidance for the Brookings community and the public on our response to the coronavirus (COVID-19) », Learn more from Brookings scholars about the global response to coronavirus (COVID-19) ». To file a complaint against a federal agency: First, contact the agency directly. USPS has tried to increase the delivery of marketing mail and has tried to compete with UPS and FedEx in the parcel delivery sector, including by forging a delivery deal with Amazon. The conditions that the Treasury imposed on the loan led the vice chairman of the USPS board, David Williams, a former USPS inspector general, to resign, alleging that the Treasury demands threatened to turn the agency into a âpolitical tool.â. Before 1971, it was a department of government, supported by taxes. The United States Postal Service is federally funded government agency that we take for granted as a utility that will always be there, like roads or water. The post office has been an American institution since 1775, when Benjamin Franklin was named the first-ever Postmaster General. The “Post Office,” or the United States Postal Service, is owned by the United States Federal Government. I do believe. Federal Government Agencies. As the financial standing of the Postal Service makes headlines, we examine how it is set up, what financial challenges it faces, and how it is managing these challenges during a global pandemic. Mail delivery is a service you receive, but not one you pay for — outside of the postage that you purchase. Source: Getty Images. It was one of the original functions of Government, mentioned in the Constitution. Postal Service) they actually do receive funding from the federal government via the annual budget in the form of “subsidies”. And how is it changing during the coronavirus pandemic? The United States Post Office Department (USPOD; also known as the Post Office or U.S. Mail) was the predecessor of the United States Postal Service, in the form of a Cabinet department, officially from 1872 to 1971. The fundamental problem is that while the USPS generates enough revenue to cover its operating costs, its pension and retiree health care liabilities push its bottom line into the red. In 2002, the Office of Personnel Management found that the Postal Service had been significantly over-paying into its pension fund, leaving it with cash beyond what was needed to meet its employee retirement liabilities. Package shipping revenues in the second quarter surged by 53.6 percent over the second quarter of 2019, which kept the USPS net loss to $2.2 billion for the quarter compared to a loss of $2.3 billion a year earlier. Post was not sent - check your email addresses! From 2008 to 2018, it reported $69 billion in losses. And what is the Fed doing about it? the Task Force on the United States Postal Service, with Postal Service Board Chairman Robert M. Duncan, we may see mail left behind or mail on the workroom floor or docks, testimony to the House Committee on Oversight and Reform, Why Trumpâs attack on USPS is an attack on the Constitution, democracy, and racial equality. In March, the $2 trillion Coronavirus Relief Bill reserved $25 billion for the USPS under the CARES Act, which was blocked by the Trump administration. Forms: Postal Service Forms. In that law, Congress instructed USPS to contribute approximately $5.6 billion per year from 2007 to 2016 and to stretch any additional obligations over the almost 40 years from 2017 to 2056. By law, the Postal Service has an obligation to provide universal serviceâthat is, to deliver mail to âas nearly as practicable the entire population of the United States.â  This forces USPS to deliver to more addresses each year, even as fewer pieces of mail are being delivered. We appreciate your patience and remain committed to … Postal workers receive federal benefits, but are not actually considered federal employees. The United States Postal Service (USPS; also known as the Post Office, U.S. Mail, or Postal Service) is an independent agency of the executive branch of the United States federal government responsible for providing postal service in the United States, including its insular areas and associated states. Second, I did not direct the cut back on hours at any of our post offices. The loan postpones, rather than solves, the USPS looming liquidity crisis. View an A-Z index of federal agencies. Sorry, your blog cannot share posts by email. The New York Times reported that Mnuchin was unusually involved in the Postmaster General recruitment process, with Postal Service Board Chairman Robert M. Duncan, a former chairman of the Republican National Committee, suggesting Louis DeJoy, who has a background in the logistics business. Like many employers, the Postal Service provides pensions for its retired employeesâand it is required, as private companies are, to set aside money from current income to cover its pension promises. (This has provoked criticism from President Trump.) The Larry Doby Post Office is located at 194 Ward Street in Paterson, New Jersey, across the street from my congressional office. Postal Service operations and standards and the need for on-time mail delivery during the ongoing pandemic and upcoming election, which as you know may be held largely by mail-in ballot.". The US postal service (despite quibbles by some) is a “quasi-governmental" organization. Whatever Happened to Teen Who Used the "Affluenza Defense" for Drunk Driving? In April, the post office requested $75 billion in emergency funding to continue processing and delivering some 48 percent of the world’s mail. You see this in news stories often- FedSmith ran a column just a week ago referring to … In the CARES Act, Congress provided a $10 billion emergency loan to the USPS. It’s a common assumption that the USPS is a federal agency, and its 7.3 million workers are federal employees. There is established in the Treasury of the United States a revolving fund to be called the Postal Service Fund which shall be available to the Postal Service without fiscal-year limitation to carry out the purposes, functions, and powers authorized by this title (other than any of the purposes, functions, or powers for which the Competitive Products Fund is available). The Postal Accountability and Enhancement Act (PAEA) required the USPS to create a $72 billion fund to pay for the cost of its post-retirement health care costs, 75 years into the future. “There is no question that the post office at the ... federal government to ease economic fallout from the virus included a $10 billion loan to the USPS, though there was no direct funding. Postal Service has been a matter of both contention and confusion since the 1970 Postal Reorganization Act (PRA) put the Postal Service on a self-sustaining basis, exempting it from general budget and funding laws and denying the executive branch control over its finances. The first stamps were issued in 1847, and city delivery got its start in 1863. Despite websites claiming they receive zero tax dollars like this one: “The Postal Service receives NO tax dollars for operating expenses and relies on the sale of postage, products and services to fund its operations.”, (Top twelve things you should know | Postal Facts - U.S. Postal Service (USPS) to achieve sustainable financial viability.”, “USPS has lost $69 billion over the past 11 fiscal years — including $3.9 billion in fiscal year 2018. Unlike other employers, though, the USPS is required by the Postal Accountability and Enhancement Act (PAEA) of 2006 to pre-fund retiree health costs out of current income. But actually, the post office isn't funded by tax dollars. It employs over 600,000; only two private employers (Amazon and Walmart) employ more people. In addition, USPS provides health benefits to its retirees, as other government employersâbut not all large private employersâdo. The unique drag on the Postal Service comes from this congressional requirement. As CNN reports, the USPS told Congress it would be out of money by September back in April of 2020. The COVID-19 pandemic has severely threatened demand and revenue for USPS, straining its already fragile finances. Postal Service page. It currently has 140,837 of them, down from 164,099 in 2013. A new analysis explains just how much the USPS benefits from the subsidies it receives from the federal government. How does unemployment insurance work? But the story's more complex than that. That’s because the post office is a quasi-federal agency, and as such, is not funded by the U.S. government. As of 2017, the USPS held a market share of over 19 percent in U.S. package delivery. For the 2019 fiscal year, it lost $8.8 billion on $71.1 billion of operating revenue. USPS Workers Are Reporting That Mail Deliveries Are Intentionally "Slowed Down", Girl Who Loves Writing Letters Started a Whole Correspondence Effort with the USPS, How This Guy Scammed UPS Shouldn't Have Been This Easy, But It Was, Republicans Are Planning to Challenge Biden’s Victory, but It’s a Long Shot. Postal Service officials are seeking a $75 billion bailout from taxpayers. The administration then offered a $10 billion loan under terms in which control over the mail service would shift to Treasury Secretary Steven Mnuchin, and package rates would be quadrupled in exchange for the funding. EDIT- "The Board of Governors of the United States Postal Service sets policy, procedure, and postal rates for services rendered, and has … The Post Office is calling for more federal cash and, again, blaming unreasonable retirement funding requirements. The budget status of the U.S. The United States Postal Service (USPS) is big. There’s been a lot of buzz surrounding the United States Postal Service lately, from the speed of mail delivery to the uncertainty of its future. It was headed by the postmaster general.. The USPS has operated at a loss since 2007. In addition, the billâwhich is unlikely to pass the Senateâmandates that the USPS must reverse any policy changes that have led to delays in mail delivery and refrain from any new policies that would reduce its mail delivery performance until the end of the COVID-19 public health emergency. The postage rate was based on the number of sheets in the letter and the distance it would travel. provided a $10 billion emergency loan to the USPS. Postal experts clapped back, saying these increases “would quickly bankrupt the agency by pricing out the likes of UPS, FedEx and Amazon from contracting with the Postal Service.”. They used to be but I think like 20 years ago the post office went private and is now only overseen by the gov't. Postal employees are federal employees. The Task Force produced a report in December 2018, urging cost-cutting and price increases. Combined with strong performance in the early 2000s, this unexpected windfall positioned USPS to catch up on the pre-funding of its retirement health benefit obligations after years of a âpay-as-you-goâ approach before the passage of PAEA. The Post Office Department issued its first postage stamps on July 1, 1847. Finally, I did not direct the elimination or any cutback in overtime.â Nevertheless, on August 18, DeJoy committed to suspending his long-term reform initiatives until after the November election. The Postal Service, which employs 650,000 people, is asking for $75 billion in aid from the government, and, according to The New York Times, another $14 billion to pay off debt related to a retirement benefits program ― a whopping $89 billion total. It relies on revenues from stamps and other service fees. The Post Office Department was created in 1792 and became a Cabinet department in 1872. The U.S. Increases in volume for packages are not expected to make up for continued weakness in marketing mail volume (down 37.2 percent, year over year) and First-Class mail volume (down 6.4 percent) as the pandemic continues. In 1971, Congress replaced the Department with the United States Postal Service, an independent entity within the executive branch. Previously, letters were taken to a Post Office, where the postmaster would note the postage in the upper right corner. Whatâs the ECB doing in response to the COVID-19 crisis? With a probable mail-in ballot voting system set for this election year, the pressure is on to settle financial unrest and questions of whether the postal service will be equipped to handle the process. Whatâs going on in the municipal bond market? Getty. Locate a Post Office. The Board appoints the Postmaster General, who acts as the CEO. The Fairness Act passed in the House of Representatives in February 2020, and a Senate vote is pending. That’s because the post office is a quasi-federal agency, and as such, is not funded by the U.S. government. All six of the current independent governors were appointed by President Trump; three slots are empty. Under the mandate, they were on the hook to pay between $5.5 and $5.8 billion a year, and postal losses mounted. It would have ranked number 44 on the 2019 Fortune 500 if it were included. Earlier this week we dealt with the popular belief that because the US Constitution mentions post offices, it would take a constitutional amendment to eliminate or privatize the USPS. A separate Postal Regulatory Commission with five members appointed by the President and confirmed by the Senate oversees the USPS, including the rates it charges. Internal memos outline new policies to avoid late departures and extra delivery trips, even if it means that âwe may see mail left behind or mail on the workroom floor or docks.â. Except that the post office is taxpayer-funded : Democrats and U.S. He promised that there would be no changes to Postal Service retail hours, that collection boxes and processing equipment will remain where they are (though no commitment was made to return boxes and equipment already removed), and that overtime hours would be granted to employees as necessary. “Now they need that money in order to make the post office work so it can take all of these millions and millions of ballots,” Trump incorrectly said in a Fox Business interview. Beyond operational challenges, the other drag on the finances of the USPS is the Postal Service Retiree Health Benefits Fund. As of now, the funding is still hanging in the balance. Trump has raised a valid issue in … Shortly after the requirements were passed, the economy sank into the Great Recession and digital competition intensified, driving down revenues. The Post Office has broad limitations about making routine business decisions that its private-sector competitors do not. The House of Representatives passed a bill on August 22 to provide $25 billion in additional government funding to the Postal Service. USPS is operated by a 11-person Board of Governors (which resembles the board of directors of a public corporation)âthe Postmaster General, his deputy (currently vacant), and nine governors appointed by the President and approved by the Senate for seven-year terms. Democratic Candidate Jon Ossoff Makes False Kelly Loeffler/Klansman Connection, Here's What Happens When a Congressman-Elect Dies Before Taking Office. The Postal Service receives NO tax dollars for operating expenses and relies on the sale of postage, products and services to fund its operations. However, combined with President Trumpâs comments questioning the security of mail-in voting, changes to Postal Service operationâsome of which were in train before DeJoyâs appointmentâhave been particularly controversial. It serves 160 million homes, businesses, and other delivery points. I really hope president Trump take a look at this and realize it's hurting business it's hurting their growth and people realize that the post office could be so much more. The Postal Service receives no direct taxpayer funds. So it’s your books of stamps, flat-rate boxes, packing and shipping materials, and even the adorable greeting cards they offer at checkout that keeps their operations running. Its expenses are also growing faster than its revenue because of increased wages, a decrease in mail volume, and something known as pre-funded healthcare — a hot topic within the postal community. But there is no “quasi” about it: the USPS is a government agency. Despite partial deferrals from Congress and the proposed USPS Fairness Act to eliminate pre-funded health benefits, the agency has accrued a reported whopping $120 billion in pension and other post-employment unfunded liabilities. Because of the rise of email and digital communication, USPS has seen the volume of First-Class Mail decline from a peak of 103.5 billion pieces in 2000 to just shy of 55 billion pieces in 2019. And have him take a look at that, because that’s the way to solve the problem.” Postal Service’s continuing problems, Ed O’Keefe calls the USPS “a quasi-government agency enshrined in the Constitution but required by law to act like a business.”. The Post Office Department was created in 1792 and became a Cabinet department in 1872. For many years, the USPS was the only federal agency subject to a pre-funding mandate on future retiree health benefits. The loan is sufficient to cover immediate cash needs for the Postal Service, according to the agencyâs 2020Q3 Fiscal Report. Stay tuned for more on the future of the USPS during this unprecedented time. The Post Office has been losing billions of dollars a year for many, many years. The U.S. Government Accountability Office (GAO) calls the post office’s financial viability a high-risk issue, saying, “Comprehensive legislative reform and additional cost-cutting measures are needed for the U.S. UPDATE: Some text in the final paragraph has been revised. In the 1970s and 1980s, the Postal Service was sometimes included and sometimes excluded from the … Clearing this misconception up is the number one item on their Top Thirteen Things You Should Know about the U.S. It's the only government agency that's actually profitable that I can think of. USPS’s total unfunded liabilities and debt ($143 billion at the end of fiscal year 2018) have grown to double its annual revenue.”. In August 2020 testimony to the House Committee on Oversight and Reform, DeJoy said he didnât explicitly order the practices that have generated criticism: âFirst, I did not direct the removal of blue collection boxes or the removal of mail processing equipment. Article continues below advertisement. Main Address: USPS Office of the Consumer Advocate 475 L'Enfant Plaza, SW Room 4012 Washington, DC 20260-2200. Government … It is classified as an “independent establishment of the executive branch of the Government of the United States” and operates independently of government control, run by its own non-political directors. While they seek to blame the COVID-19 coronavirus pandemic, the facts are plain. USPS is experiencing unprecedented volume increases and limited employee availability due to the impacts of COVID-19. Although COVID-19 has choked off the USPS revenue in recent months, factors that arose well before coronavirus have contributed to the unsustainability of the Postal Serviceâs financial situation for years. Postmaster Louis DeJoy has been invited to testify in front of the House Oversight Committee “in a sign of congressional concern over the possibility of delays.”, The testimony was reportedly requested "to examine recent changes to U.S. Toll Free: 1-800-275-8777. Allow for 50% prefunded pensions and watch the post office grow. State Government Agencies. WASHINGTON (AP) — As many high-profile agencies sit idle because of the federal government shutdown, others are humming along just fine, thank you. In April 2018, President Trump created the Task Force on the United States Postal Service, chaired by Treasury Secretary Steve Mnuchin. If you are unable to resolve an issue with a federal government agency, contact the office of the Inspector General (IG) of that agency. The Hutchins Center on Fiscal and Monetary Policy, All six of the current independent governors were appointed by President Trump, factors that arose well before coronavirus, it lost $8.8 billion on $71.1 billion of operating revenue, First-Class Mail decline from a peak of 103.5 billion pieces in 2000 to just shy of 55 billion pieces in 2019, This has provoked criticism from President Trump, as nearly as practicable the entire population of the United States, the Postal Service had been significantly over-paying into its pension fund, USPS has missed $42.6 billion of required payments on its health benefits since 2010, which kept the USPS net loss to $2.2 billion for the quarter compared to a loss of $2.3 billion a year earlier. Since the Postal Service’s … Its official statement is, “The Postal Service receives NO tax dollars for operating expenses and relies on the sale of postage, products and services to fund its operations.”. 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