GOA Study Finds More Aggressive Steps Needed to Make USPS Viable

WASHINGTON, DC—04/12/10—The U.S. Government Accountability Office (GAO) today released its own report on the financial viability of the U.S. Postal Service. It’s central finding was that the “USPS’s business model is not viable due to USPS’s inability to reduce costs sufficiently in response to continuing mail volume and revenue declines.” It further noted that “USPS’s new business plan recognizes immediate actions are needed, but USPS has made limited progress on some options, such as closing facilities.”

According to the GAO, “USPS may be able to improve its financial viability if it takes more aggressive action to reduce costs, particularly compensation and benefit costs that comprise 80 percent of its total costs, as well as increasing revenues within its current authority. However, it is unlikely that such changes would fully resolve USPS’s financial problems, unless Congress also takes actions to address constraints and legal restrictions.

“If no action is taken, risks of larger USPS losses, rate increases, and taxpayer subsidies will increase,” the report continues. “To facilitate progress in these difficult areas, Congress could set up a mechanism, such as one similar to the military Base Realignment and Closure Commission, where independent experts could recommend a package of actions with time frames.

“Key issues also need to be addressed related to what changes, if any, should be made to delivery or retail services; to allow USPS to provide new products or services in nonpostal areas; and to realign USPS operations, networks, and workforce,” the GAO concluded.

PDFs of the “Strategies and Options to Facilitate Progress toward Financial Viability” Highlights Page and Full Report are available for downloading from www.gao.gov.