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The U.S. Postal Service is no longer facing an immediate cash crisis, according to postal regulators.
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Regulators told lawmakers that an April decision to temporarily suspend some payments into a retirement fund has significantly improved the agency’s finances. The move is expected to free up about $2.5 billion this fiscal year.
However, regulators stressed the relief is only temporary. The Postal Service still faces long-term challenges from declining mail volume and rising costs.
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“The situation facing the Postal Service is a five-alarm fire,” said Postal Regulatory Commissioner Ashley Poling. “Volume of traditional mail continues to decline, a result of both ongoing electronic diversion and an acceleration due in part to the postal service’s aggressive pricing strategy. And at the same time, service quality continues to suffer as the leadership of the Postal Service has decided to slow service standards for several mail products over the last five years, including twice for the flagship first-class mail product, while also lowering its service performance targets.
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“What this means is simple the American people are paying more, while fewer mail pieces are being delivered in the expected time frame as declining mail volumes and an increasing number of delivery points continue to put financial pressure on the postal service, the incentive to underperform service expectations can be expected to increase.“
Officials remain divided over how to address those issues, with debate continuing over stamp price increases, delivery standards and the level of federal oversight.
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USPS officials suggested an increased debt limit, funding from Congress and treasury bonds as possible solutions.
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