The Financial Condition of the Postal Service

CHAIRMAN CUMMINGS' OPENING STATEMENT

PURPOSE

The Committee will hold a hearing to review the current financial condition of the Postal Service, as well as the urgent need for reform legislation.

BACKGROUND

The Postal Service’s financial condition has been deteriorating over the past decade for three primary reasons: (1) a decline in first-class mail; (2) expenses increasing at a faster rate than revenues; and (3) requirements put in place by Congress in 2006 to make billions of dollars of payments each year to pre-fund retiree health benefits. To conserve cash, the Postal Service has defaulted on more than $40 billion in payments owed to pre-fund retiree health care expenses. However, the Postal Service’s liquidity continues to dwindle and it faces challenges with having enough cash on hand to conduct its essential mission of providing universal mail service. For all of these reasons, the Government Accountability Office (GAO) has placed the Postal Service’s financial condition on its “high-risk list” since 2009.