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Highlights

The Postal Accountability and Enhancement Act of 2006 required GAO to evaluate strategies and options for reforms of the United States Postal Service (USPS). USPS's business model is to fulfill its mission through self-supporting, businesslike operations; however, USPS has experienced increasing difficulties. Due to volume declines, losses, a cash shortage, and rising debt, GAO added USPS's financial condition to its high-risk list in July 2009. GAO's objectives were to assess (1) the viability of USPS's business model, (2) strategies and options to address challenges to its business model, and (3) actions Congress and USPS need to take to facilitate progress toward financial viability. GAO primarily drew on its past work; other studies; USPS data; interviews with USPS, unions, management associations, Postal Regulatory Commission, and mailing industry officials; and stakeholder input.

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Recommendations

Matter for Congressional Consideration

Matter Status Comments
To address USPS's financial viability in the short term, Congress may wish to consider providing financial relief to USPS, including modifying its retiree health benefit cost structure in a fiscally responsible manner. Congress may also wish to consider any and all options available to reduce USPS costs, including revising the statutory framework for collective bargaining to ensure that binding arbitration takes its financial condition into account. At the same time, to facilitate making progress in difficult areas, Congress may wish to consider establishing (1) a panel of independent experts, similar to a BRAC-like commission, to coordinate with USPS and stakeholders to develop a package of proposed legislative and operational changes needed to reduce costs and address challenges to USPS's business model and (2) procedures for the review and approval of these proposals by the President and Congress. These proposals could focus on adapting delivery and retail services to declining mail volumes; making postal operations, networks, and workforce more cost-efficient; and generating new revenue.
Open
As of March 2020, Congress has taken no action on this matter.
Congress may also wish to consider requiring USPS to provide regular reports to Congress to ensure that USPS is making progress to improve its financial condition. These reports could include the actions taken to reduce costs and increase revenues, the results of these actions, and progress toward addressing financial problems.
Closed - Not Implemented
The House and Senate oversight committees introduced comprehensive postal reform legislation in 2013, S. 1486 and H.R. 2748, that included some of the options discussed in our report, but these bills were not passed by the 113th Congress so we are closing out this recommendation. The House bill, H.R. 2748, included 2 provisions that would have enhanced USPS annual reporting related to costs and revenues. First, sec. 105 would have required USPS to include the overall change in productivity (using a formula by the Postal Regulatory Commission)and the resulting effect on overall postal costs in its annual report to the Postal Regulatory Commission. Second, sec. 404 would have required USPS's annual report to the Commission to include the financial results, rates, and the quality of its nonpostal services, including services provided for State or other government agencies. This information would be considered by the Commission in its annual report to the Congress and President on the Postal Service's compliance with applicable requirements. The Senate bill, S. 1486, included a similar provision, sec. 302, requiring USPS to annually report to the Commission on the costs and revenues of its nonpostal services. As the bills were not passed, we are closing out the recommendation

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