Growls

In recent testimony before a subcommittee of the House Committee on Oversight and Government Reform, the General Accountability Office (GAO) told members of Congress:

“The U.S. Postal Service’s (USPS) financial condition and outlook deteriorated significantly during fiscal year 2009.  USPS was not able to cut costs fast enough to offset declining mail volume and revenues resulting from the economic downturn and changing mail use.  Facing an unprecedented cash shortfall, USPS stated that it would have insufficient cash on hand to make its mandated $5.4 billion payment to prefund postal retiree health benefits that was due by the end of the fiscal year.

GAO says that USPS’ financial condition and outlook for fiscal year 2009 “continue to be challenging.” GAO makes four major points:

• “In fiscal year 2009, mail volume declined about 28 billion pieces, or about 14 percent, from the prior fiscal year, when volume was about 203 billion pieces; revenue declined from about $75 billion to about $68 billion.

• A looming cash shortfall necessitated last-minute congressional action to reduce USPS’s mandated payments to prefund retiree health benefits by $4 billion. In the absence of congressional action, USPS was on track to lose about $7 billion.

• USPS debt increased at the end of fiscal year 2009 by the annual statutory limit of $3 billion, bringing outstanding debt to $10.2 billion.  At this rate, USPS will reach its total $15 billion statutory debt limit in fiscal year 2011.

• USPS projects annual deficits over $7 billion in fiscal years 2010 and 2011, and continuing large cash shortfalls.

In concluding the report’s highlights, GAO wrote:

“ . . . . Allowing USPS to compete more broadly with the private sector could lose money, and fair competition issues would need to be considered. Thus, in addition to its revenue-generation initiatives, USPS will need to continue making significant reductions in its workforce and network costs. When we recently added USPS’s financial condition to our high-risk list, we said that restructuring will require USPS to align its costs with revenues, generate sufficient earnings to finance capital investment, and manage its debt.”

Congress can’t manage the nation’s postal system, but are conceited enough to think they can manage America’s medical care system, which is one-sixth of the nation’s economy. Sheesh!

In addition to the one-page highlights, there are 13 pages of testimony.