USPS Has Nearly Exhausted the $10B Congress Awarded It for COVID-19 Relief
The Postal Service's financial outlook has improved significantly, though its leadership is far from celebrating.
The U.S. Postal Service has spent nearly all of the $10 billion Congress allocated to it last year to offset losses caused by the COVID-19 pandemic, placing the mailing agency in an improved financial position after recently cautioning it may have to cease its normal operations.
USPS has exhausted $8.6 billion from the appropriation, which has come in the form of reimbursements of expenses from the Treasury Department. Congress first authorized the funds in March 2020 as a loan included in the Coronavirus Aid, Relief and Economic Security (CARES) Act, leading to a drawn out negotiation with the Trump administration over the terms for accessing the money. Congress in December passed another COVID-19 relief measure that negated the Postal Service’s obligation to repay the money.
Still, USPS said in a statement it is accessing the money “consistent with our understanding with the Department of Treasury.” That agreement triggered outcry that the Trump administration was placing onerous conditions on postal management, though USPS denied that Trump officials were seeking undue influence on its operations.
The Postal Service declined to provide additional information on how it is using its congressionally authorized cash injection or the nature of its agreement with Treasury.
Tapping into the relief money had an immediate impact on USPS finances. The agency ended March with $25.8 billion in the Postal Service Fund, up from $16 billion the previous month. A year ago, USPS had just $9 billion in the account, leading to dire warnings that it would run out of cash in six months and a request for $75 billion in relief from Congress.
After President Trump balked at providing USPS with a cash infusion and lawmakers compromised on the loan-based approach, postal management conceded that it no longer faced such an immediate crisis. The agency’s finances were also boosted by a higher-than-expected uptick in package business resulting from the pandemic, leading to a $2 billion revenue increase in the sector in fiscal 2020. USPS still saw a more than $9 billion loss last year and its leadership has continued to stress that immediate reforms are necessary to avoid fiscal calamity.
The improved cash situation, however, has enabled USPS to make capital investments it had put off for many years. It recently announced a contract that will start the process of replacing its aging fleet of more than 200,000 vehicles. Postmaster General Louis DeJoy last month unveiled a 10-year business plan that, in addition to slowing mail delivery windows and closing processing plants, would make a $40 billion investment in various modernization projects.
Steve Kearney, executive director of the Alliance of Nonprofit Mailers, said the financial update should inform postal management’s thinking, as the agency does not appear as close to running out of cash as previously predicted.
“I wish postal leadership could approach its reform and recovery without repeatedly predicting the sky is falling,” Kearney said.