How Much Tax Money Does The Usps Get

The U.s. Mail service (USPS) is big. It employs over 600,000; only ii private employers (Amazon and Walmart) employ more people. It serves 160 million homes, businesses, and other delivery points. It would have ranked number 44 on the 2019 Fortune 500 if it were included. The COVID-19 pandemic has severely threatened demand and revenue for USPS, straining its already fragile finances. As the financial continuing of the Postal Service makes headlines, nosotros examine how it is gear up up, what financial challenges it faces, and how it is managing these challenges during a global pandemic.

How is the Post governed?

The Second Continental Congress appointed Benjamin Franklin as the starting time Postmaster Full general in 1775. The Postal service Role Section was created in 1792 and became a Cabinet department in 1872. In 1971, Congress replaced the Section with the Us Postal Service, an contained entity within the executive branch. USPS is operated by a 11-person Board of Governors (which resembles the board of directors of a public corporation)—the Postmaster General, his deputy (currently vacant), and ix governors appointed by the President and approved past the Senate for seven-year terms. All half dozen of the current independent governors were appointed by President Trump; 3 slots are empty. The Lath appoints the Postmaster Full general, who acts equally the CEO.

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.

How is the Postal Service financed?

The Postal Service receives no direct taxpayer funds. It relies on revenues from stamps and other service fees. Although COVID-xix has choked off the USPS revenue in contempo months, factors that arose well before coronavirus have contributed to the unsustainability of the Postal Service'south financial situation for years.

What are the long-term problems with how the Postal Service is financed?

The central problem is that while the USPS generates enough acquirement to cover its operating costs, its alimony and retiree health care liabilities push button its bottom line into the red. The USPS has operated at a loss since 2007. From 2008 to 2018, it reported $69 billion in losses. For the 2019 fiscal year, information technology lost $viii.8 billion on $71.1 billion of operating revenue.

Considering of the rise of email and digital communication, USPS has seen the volume of Offset-Class Post turn down from a peak of 103.5 billion pieces in 2000 to just shy of 55 billion pieces in 2019. USPS has tried to increase the delivery of marketing mail service and has tried to compete with UPS and FedEx in the parcel commitment sector, including by forging a delivery deal with Amazon. (This has provoked criticism from President Trump.) As of 2017, the USPS held a market share of over xix percent in U.S. bundle commitment. By police, the Postal service has an obligation to provide universal service—that is, to evangelize mail to "as nearly as practicable the unabridged population of the United States."  This forces USPS to deliver to more than addresses each year, even as fewer pieces of postal service are beingness delivered.

As First-class Mail volumes take declined, the USPS has been reducing the number of blue mailboxes for years. It currently has 140,837 of them, downwardly from 164,099 in 2013.

What is the issue with USPS retiree wellness benefits?

Beyond operational challenges, the other drag on the finances of the USPS is the Mail Retiree Wellness Benefits Fund. Like many employers, the Post provides pensions for its retired employees—and it is required, as private companies are, to prepare aside money from electric current income to cover its alimony promises.

In addition, USPS provides health benefits to its retirees, as other regime employers—but not all large private employers—do. Unlike other employers, though, the USPS is required past the Postal Accountability and Enhancement Act (PAEA) of 2006 to pre-fund retiree wellness costs out of current income. The unique drag on the Postal Service comes from this congressional requirement.

In 2002, the Office of Personnel Management found that the Post had been significantly over-paying into its pension fund, leaving information technology with cash beyond what was needed to meet its employee retirement liabilities. Combined with potent operation in the early on 2000s, this unexpected windfall positioned USPS to take hold of upward on the pre-funding of its retirement health benefit obligations later years of a "pay-every bit-yous-go" approach before the passage of PAEA. In that law, Congress instructed USPS to contribute approximately $5.6 billion per yr from 2007 to 2016 and to stretch any additional obligations over the almost 40 years from 2017 to 2056.

Shortly afterward the requirements were passed, the economy sank into the Corking Recession and digital competition intensified, driving downwards revenues. As a result, USPS has missed $42.6 billion of required payments on its health benefits since 2010 and $five.6 billion in required contributions to its pension plan since 2014.

What strains has the COVID-xix pandemic put on the finances of the Post?

Provisions of personal protective equipment to employees, a decrease in the ability to use air transportation for deliveries, increased paid sick leave, and low client demand have all contributed to surging costs and declining revenues. Package shipping revenues in the 2nd quarter surged by 53.6 percent over the 2nd quarter of 2019, which kept the USPS internet loss to $2.2 billion for the quarter compared to a loss of $two.3 billion a year earlier. Increases in volume for packages are not expected to brand up for continued weakness in marketing post volume (downward 37.two percent, year over year) and First-Class mail volume (downwardly 6.4 percent) as the pandemic continues.

What has Congress done to support the Mail?

In the CARES Act, Congress provided a $10 billion emergency loan to the USPS. The loan is sufficient to cover immediate cash needs for the Mail service, according to the agency's 2020Q3 Financial Report. 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 bureau into a "political tool."

The loan postpones, rather than solves, the USPS looming liquidity crunch. The Firm of Representatives passed a bill on August 22 to provide $25 billion in additional government funding to the Postal Service. In improver, the pecker—which is unlikely to pass the Senate—mandates 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 stop of the COVID-19 public health emergency.

What steps has Postmaster General Louis DeJoy taken since taking office in June 2020?

In Apr 2018, President Trump created the Task Force on the United States Post, chaired by Treasury Secretary Steve Mnuchin. The Task Strength produced a study in December 2018, urging toll-cutting and price increases. 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 Commission, suggesting Louis DeJoy, who has a background in the logistics business concern.

Price-cutting efforts at the USPS were already underway when DeJoy was sworn in as Postmaster General in June 2020. Withal, combined with President Trump'south comments questioning the security of mail-in voting, changes to Mail operation—some of which were in train before DeJoy's appointment—accept been especially controversial. Internal memos outline new policies to avoid late departures and actress delivery trips, fifty-fifty if it means that "we may run into mail left behind or mail on the workroom floor or docks."

In August 2020 testimony to the House Commission on Oversight and Reform, DeJoy said he didn't explicitly lodge the practices that take generated criticism: "Commencement, I did not direct the removal of blueish collection boxes or the removal of postal service processing equipment. Second, I did not direct the cut back on hours at any of our post offices. Finally, I did not direct the elimination or any cutback in overtime." Even so, on August xviii, DeJoy committed to suspending his long-term reform initiatives until later on the November election. He promised that at that place would be no changes to Mail 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 exist granted to employees as necessary.

Source: https://www.brookings.edu/blog/up-front/2020/08/26/how-is-the-u-s-postal-service-governed-and-funded/

Posted by: haywardunked1974.blogspot.com

Share this post