U.S. Postal Service finances are trending in the right direction, but the agency still lost $740 million during the third quarter, according to a USPS summary of its upcoming financial report.
Total losses for the agency this year have reached nearly $4 billion including larger negatives of $1.3 billion and $1.9 billion for the first two quarters, respectively. USPS plans to release its full third-quarter financial report Monday.
Labor groups have said the Postal Service could essentially break even if not for a 2006 congressional mandate that requires the agency to prefund employee retirement benefits — a common practice in the private sector, but unique to the USPS among federal agencies. The obligation eats up about $5.5 billion a year, which is roughly the amount the postal service is on track to lose this year.
Postmaster General Patrick Donahoe supported cancelling the prefunding requirement during testimony before Congress in May, calling it the “single biggest change that would have the least negative impact” among possible USPS reforms.
The Postal Service has shown dramatic improvement during the first three quarters of this year after posting a loss of nearly $16 billion in 2012. In a statement Friday, the agency credited increased efficiency and a decrease in workers’ compensation expenses for the better numbers.
However, officials said USPS will not return to financial stability without an agency overhaul. “We need to make fundamental changes to the way we currently do business,” said USPS Chief Financial Officer Joe Corbett in the statement. “Without comprehensive postal reform legislation signed into law, our hands are tied and we expect multibillion-dollar annual losses to continue.”
Last week, two top senators introduced bipartisan postal legislation that would restructure the prefunding requirement, allow a gradual end to Saturday mail delivery if deemed financially necessary and make curbside delivery or cluster boxes mandatory for businesses and new homes, with some exceptions.
Rep. Darrell Issa (R-Calif.) proposed similar legislation in the House, but Democrats in that chamber opposed the service cuts. The measure passed through committee without support from members of that party.
Congress is expected to take up the issue again when lawmakers return from a five-week recess next month.
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