Postal Service financial woes will continue in 2011

The ailing U.S. Postal Service will experience a net loss in fiscal 2011 similar to that of 2010, according to agency estimates in President Obama's budget.

Declining mail volumes have contributed to net losses for the agency every year since 2007. The Postal Service expects that trend to continue through 2011, when losses will total $7.8 billion.

The fiscal 2011 budget, which acknowledges the Postal Service's financial concerns, commits the Obama administration to working with the agency, its employee unions, Congress and other stakeholders to keep mail operations viable. Discussions already are under way on several issues, said Gerald McKiernan, a USPS spokesman.

The administration is aware of the agency's interest in moving to five-day delivery, he said, though no changes will occur before Sept. 30. The proposed fiscal 2011 budget would not eliminate Saturday mail delivery.

The Postal Service also is exploring alternatives to a 2006 provision requiring it to prefund retiree health benefits at $5 billion per year, McKiernan said, adding USPS is looking for some relief or readjustment of payment.

The agency is the only federal organization with a prefunding obligation. Congress in 2009 reduced the payment to $1.4 billion for that year, but according to McKiernan, no specific long-term proposals are on the table.

In a Feb. 1 question-and-answer session hosted by YouTube, Obama said he has no plans to privatize USPS because of its commitment to universal service.

"[Privatization is] a bad idea, most of the time," he said, adding that companies focused on revenue likely wouldn't be willing to deliver mail to hard-to-reach areas. "You've got to make sure that you look carefully at what privatization proposals are out there."

The Postal Service on Feb. 9 announced a net loss of $297 million in the first quarter of fiscal 2010. The agency posted a 3.9 percent decline in revenue but also saw expenses decline 4.4 percent because of work-hour reductions equivalent to 15,800 full-time employees.

"Unfortunately, economic drivers that significantly affect mail volumes, such as continuing high unemployment levels and lower investments, appear to be lagging general economic recovery and last quarter's growth in [gross domestic product]," said John Corbett, USPS chief financial officer and executive vice president, in a statement. "This situation, coupled with the growth in electronic alternatives to mail, creates a very challenging environment."

Stay up-to-date with federal news alerts and analysis — Sign up for GovExec's email newsletters.
Close [ x ] More from GovExec

Thank you for subscribing to newsletters from
We think these reports might interest you:

  • Sponsored by G Suite

    Cross-Agency Teamwork, Anytime and Anywhere

    Dan McCrae, director of IT service delivery division, National Oceanic and Atmospheric Administration (NOAA)

  • Data-Centric Security vs. Database-Level Security

    Database-level encryption had its origins in the 1990s and early 2000s in response to very basic risks which largely revolved around the theft of servers, backup tapes and other physical-layer assets. As noted in Verizon’s 2014, Data Breach Investigations Report (DBIR)1, threats today are far more advanced and dangerous.

  • Federal IT Applications: Assessing Government's Core Drivers

    In order to better understand the current state of external and internal-facing agency workplace applications, Government Business Council (GBC) and Riverbed undertook an in-depth research study of federal employees. Overall, survey findings indicate that federal IT applications still face a gamut of challenges with regard to quality, reliability, and performance management.

  • PIV- I And Multifactor Authentication: The Best Defense for Federal Government Contractors

    This white paper explores NIST SP 800-171 and why compliance is critical to federal government contractors, especially those that work with the Department of Defense, as well as how leveraging PIV-I credentialing with multifactor authentication can be used as a defense against cyberattacks

  • Toward A More Innovative Government

    This research study aims to understand how state and local leaders regard their agency’s innovation efforts and what they are doing to overcome the challenges they face in successfully implementing these efforts.

  • From Volume to Value: UK’s NHS Digital Provides U.S. Healthcare Agencies A Roadmap For Value-Based Payment Models

    The U.S. healthcare industry is rapidly moving away from traditional fee-for-service models and towards value-based purchasing that reimburses physicians for quality of care in place of frequency of care.

  • GBC Flash Poll: Is Your Agency Safe?

    Federal leaders weigh in on the state of information security


When you download a report, your information may be shared with the underwriters of that document.