Postal Service seeks ‘firmer financial footing’ from Congress, new appointments from Trump

Among the hundreds of political executives that the Trump administration must nominate to fill out the ranks of federal agencies, the U.S. Postal Service is cal...

Reporter Jory Heckman discusses this story on Federal Drive with Tom Temin

Among the hundreds of political executives that the Trump administration must nominate to fill out the ranks of federal agencies, the U.S. Postal Service is calling upon the White House to submit names for its management board.

The U.S. Postal Service currently has zero independently appointed governors on its board, and hasn’t had a new governor sworn in over seven years, Postmaster General Megan Brennan told reporters Wednesday. Without those governors at the helm, USPS cannot legally make several long-term decisions, like selecting a new postmaster general, introducing new postal products or revamping its business strategies.

The last member of the postal board stepped down in December 2016 after his term expired. Until new postal governors have been nominated by the president and confirmed by the Senate, the Postal Service will continue to be led by a Temporary Emergency Committee steered by Brennan and Deputy Postmaster General Ron Stroman.

“We encourage the administration to nominate postal governors, and we ask that the Senate act swiftly on those nominations. However, until such governors are appointed and confirmed, we will continue to ensure the efficient operation of the Postal Service through the Temporary Emergency Committee, and to exercise any of the board’s powers that are necessary for continuity of postal operations,” Brennan said.

Meanwhile, the Postal Service continues to look to both Congress and the Postal Regulatory Commission (PRC), which sets the rate for postage costs, for some improvements for its financial future.

USPS posted a $562 million loss for the second quarter of fiscal 2017, despite continued double-digit growth in package volume and revenue. However, the quarterly loss stands in contrast to the $2 billion net loss for the same quarter a year ago. The cost of USPS’ mandatory pre-funding of postal retirees’ benefits fell by $1.2 billion, due to a change in the law that took effect this year.

The Postal Service reported $12 million in controllable income this quarter, which fell short of the $576 million it posted in the second quarter of fiscal 2016. Postal officials attributed some of its losses to the reversal of the two-cent exigent postal rate increase, which the PRC repealed in April 2016. USPS estimates it would have earned $500 million in additional revenue this quarter had the rate remained.

“The financial results we are releasing today demonstrate that the Postal Service continues to face systemic business model challenges, as well as increased competition in the marketplace,” Brennan said. “Our lower controllable income and net loss for the quarter reflect long-term, systemic trends that will continue will continue to impact our business.”

In order to improve the financial trajectory of the USPS, postal officials have called on lawmakers in the House to pass a postal reform bill that left committee in February. The bill would, among other things, significantly reduce the burden of the pre-funding mandate and automatically enroll postal retirees in Medicare Part B.

“The bill is urgently needed and is also supported by a broad cross-section of the mailing industry, the postal unions and management associations,” Brennan said. “Enactment of this legislation, as currently drafted, is necessary to put the Postal Service on firmer financial footing.

The postal reform bill, if passed, would give USPS $29 billion in combined cost savings and new revenue over the next five years, Brennan said. The bill also restores half of the exigent price increase, which would equal a one-cent increase on postage stamps, and allows the postal service to provide “non-postal products and services to state, local and tribal governments.”

Fredric Rolando, president of the National Association of Letter Carriers, who generally supports the postal reform effort, called on lawmakers to keep the momentum going on this legislation.

“Today’s financial report shows the underlying business strength of the U.S. Postal Service while also indicating the need to address external matters beyond USPS control,” Rolando said in a statement. “Addressing the external financial burdens posed by the price rollback and by pre-funding would allow USPS to continue to provide Americans and their businesses with the industrial world’s most affordable delivery network.”

One potential hiccup for the postal reform bill could be the departure of Rep. Jason Chaffetz (R-Utah), the chairman of the House Oversight and Government Reform Committee and the bill’s original sponsor. Chaffetz made the surprise announcement in April that he wouldn’t seek re-election in 2018, and may step down before the end of his final term.

The postmaster general also said it was “equally necessary” that USPS gain some flexibility in setting the prices for its market-dominant products, like first-class mail. The PRC is currently performing its 10-year review of the postal rate-setting system that’s currently in place.

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