By David Shepardson
WASHINGTON, June 4 (Reuters) – The U.S. Postal Regulatory Commission told lawmakers on Thursday it does not believe the financially troubled Postal Service will run out of cash next year, but it faces significant issues that must be addressed.
Robert Taub, vice chair of the commission responsible for the Postal Service’s oversight, told a U.S. House subcommittee that recent actions to provide financial relief have extended the time period before USPS’s “reported insolvency” by at least another several years if it makes key decisions about its expenditures.
“Given the Postal Service’s severe and worsening financial situation, we as a nation must respond. I do not believe that we can leave it up to the Postal Service to save itself,” Taub’s testimony said.
Postmaster General David Steiner has warned USPS could run out of cash as soon as February.
Taub also said the reform plan USPS adopted six years ago has not halted ongoing losses and has “consistently slowed mail delivery across the United States, specifically in rural areas.”
One key question is whether USPS should continue to deliver to 170 million addresses six days a week, which costs $3.4 billion annually.
USPS has reported net losses of about $120 billion since 2007, as first-class mail, its most profitable product, has fallen sharply with the shift to digital communication even as the agency must maintain costly nationwide delivery operations.
USPS said last week it was suspending non-essential spending on travel, office supplies and consultants. Steiner told officers in a memo the moves were “to protect core operations and ensure we can continue meeting all essential obligations.”
Last month, the Postal Service said it would temporarily suspend employer payments for a federal pension program and plans to raise the price of first-class mail stamps to 82 cents from 78 cents, effective July 12.
Suspending employee pension contributions will conserve $2.5 billion through September 30 and potentially $15 billion through 2030.
In March, Steiner said the Postal Service was hiring restructuring advisers to help address its financial troubles and has asked Congress for additional reforms.
(Reporting by David Shepardson; Editing by Joe Bavier)
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