Yesterday, Postmaster General Patrick R. Donahoe met with the House Oversight and Government Reform Committee to discuss the current condition of the United States Postal Service. Following the hearing, the Government Accountability Office (GAO) released a report stating that the USPS needed to take urgent action to stabilize the current financial situation.
In the report, the GAO found that the USPS was continuing to spend way more than it was taking in and had reached its borrowing limit of $15 billion. One of the largest issues the GAO identified was that it had not been able to make payments of $11.1 billion in retirement benefits, a mandatory spending obligation.
In order to curb some of these costs, the USPS had announced in February plans to implement a five-day mail delivery service set to begin August 5, 2013. However, the Postal Service decided to scrap that plan when the GAO told the Postal Service it is obligated to provide six-day delivery service.
According to the Washington Post, the Postmaster General told the committee, “We are losing $25 million dollars every day and we are on an unsustainable path,” and claimed they (postal workers) were operating under a “broken business model.” The General argued the Postal Service could require taxpayer funds if it is not allowed to change its model. (Taxpayers do no currently fund the Postal Service – revenues generated from providing services do – but taxpayers could be asked to bail out the service.)
Oversight Chairman Daniel Issa (R-CA) told the general, it is not a time for excuses and they (USPS) must use their full authority to avoid a taxpayer bailout.