U.S. Postal Service: Urgent Action Needed to Achieve Financial Sustainability
Published: 2013-04-17T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: USPS is in a serious financial crisis as its declining mail volume has not generated sufficient revenue to cover its expenses and financial obligations. First-Class Mail--which is highly profitable and generates the majority of the revenues used to cover overhead costs--declined 33 percent since it peaked in fiscal year 2001, and USPS projects a continued decline through fiscal year 2020. Mail volume decline is putting USPS's mission of providing prompt, reliable, and efficient universal services to the public at risk.
This testimony discusses (1) USPS's financial condition, (2) initiatives to reduce costs and increase revenues, and (3) actions needed to improve USPS's financial situation. The testimony is based primarily on GAO's past and ongoing work, its analysis of USPS's recent financial results, and recent information on USPS's proposal for a change in delivery service.
In previous reports, GAO has provided strategies and options that USPS and Congress could consider to better align USPS costs with revenues and address constraints and legal restrictions that limit USPS's ability to reduce costs and improve efficiency. GAO has also stated that Congress and USPS need to reach agreement on a comprehensive package of actions to improve USPS's financial viability.
section_title: What GAO Found
paragraphs: The U.S. Postal Service (USPS) continues to incur unsustainable operating deficits, has not made required payments of $11.1 billion to prefund retiree health benefits, and has reached its $15 billion borrowing limit. Thus far, USPS has been able to operate within these constraints, but now faces a critical shortage of liquidity that threatens its financial solvency and ability to finance needed capital investment. USPS had an almost 25 percent decline in total mail volume and net losses totaling $40 billion since fiscal year 2006. While USPS achieved about $15 billion in savings and reduced its workforce by about 168,000 over this period, its debt and unfunded benefit liabilities grew to $96 billion by the end of fiscal year 2012. USPS expects mail volume and revenue to continue decreasing as online bill communication and e-commerce expand.
USPS has several initiatives to reduce costs and increase its revenues. To reduce costs, USPS announced a 5-year business plan in February 2012 with the goal of achieving $22.5 billion in annual cost savings by the end of fiscal year 2016, which included a proposed change in the delivery schedule. USPS has now put all changes in delivery service on hold, which will reduce its ability to achieve the full 5-year business plan savings. USPS has begun implementing other parts of the plan, which includes needed changes to its network. To achieve greater savings, USPS's Board of Governors recently directed postal management to accelerate these efforts. To increase revenue, USPS is pursuing 55 initiatives. While USPS expects shipping and package services to continue to grow, such growth is not expected to fully offset declining mail volume.
USPS needs to reduce its expenses to avoid even greater financial losses, repay its outstanding debt, continue funding its retirement obligations, and increase capital for investment, including replacing its aging vehicle fleet. Also, Congress needs to act to (1) modify USPS's retiree health benefit payments in a fiscally responsible manner; (2) facilitate USPS's ability to align costs with revenues based on changing workload and mail use; and (3) require that any binding arbitration resulting from collective bargaining takes USPS's financial condition into account. No one action in itself will address USPS's financial condition; GAO has previously recommended a comprehensive package of actions. If Congress does not act soon, USPS could be forced to take more drastic actions that could have disruptive, negative effects on its employees, customers, and the availability of postal services. USPS also reported that it may need to prioritize payments to employees and suppliers ahead of those to the federal government.

section_title: Letter
paragraphs: We appreciate the opportunity to be here today to discuss the status of  U.S. Postal Service’s (USPS) financial condition and actions needed to  address USPS’s financial challenges.  We added USPS’s financial  condition to our High Risk List in 2009, and USPS continues to face a  serious financial crisis as its mail volume declines. USPS has not  generated sufficient revenue to cover its expenses and financial  obligations. While USPS must continue its efforts to align costs with  revenues, congressional action is needed to facilitate necessary changes  and help USPS begin to transition to financial sustainability.
This testimony discusses (1) USPS’s financial condition, (2) USPS’s  initiatives to reduce costs and increase revenues, and (3) actions needed  to improve USPS’s financial situation.  This testimony is based primarily  on our past and ongoing work examining various aspects of USPS’s  operations and our analysis of USPS’s recent financial results, and recent  information on USPS’s proposal for a change in delivery service that we  reviewed from February 2013 to April 2013. This testimony is based on  work conducted in accordance with generally accepted government  auditing standards. Those standards require that we plan and perform the  audit to obtain sufficient, appropriate evidence to provide a reasonable  basis for our findings and conclusions based on our audit objectives. We  believe that the evidence obtained provides a reasonable basis for our  findings and conclusions based on our audit objectives.
subsections: section_title: USPS’s Financial Condition
paragraphs: USPS faces a dire financial situation and does not have sufficient  revenues to cover its expenses, putting its mission of providing prompt,  reliable, and efficient universal services to the public at risk. USPS  continues to incur operating deficits that are unsustainable, has not made  required payments of $11.1 billion to prefund retiree health benefit  liabilities,USPS lacks liquidity to maintain its financial solvency or finance needed   and has reached its $15 billion borrowing limit. Moreover,  capital investment.  As presented in table 1, since fiscal year 2006, USPS  has achieved about $15 billion in savings and reduced its workforce by  about 168,000, while also experiencing a 25 percent decline in total mail  volume and net losses totaling $40 billion.
As a result of significant declines in volume and revenue, USPS reported  that it took unprecedented actions to reduce its costs by $6.1 billion in  fiscal year 2009.  Also in 2009, a cash shortfall necessitated  congressional action to reduce USPS’s mandated payment to prefund  retiree health benefits from $5.4 billion to $1.4 billion.  In 2011, USPS’s  $5.5 billion required retiree health benefit payment was delayed until  August 1, 2012. USPS missed that payment as well as the $5.6 billion  that was due by September 30, 2012.
USPS continues to face significant decreases in mail volume and  revenues as online communication and e-commerce expand. While  remaining among USPS’s most profitable products, both First-Class Mail  and Standard Mail volumes have declined in recent years as illustrated in  figure 1. First-Class Mail—which is highly profitable and generates the  majority of the revenues used to cover overhead costs—declined 33  percent since it peaked in fiscal year 2001, and USPS projects a  continued decline through fiscal year 2020.  Standard Mail (primarily  advertising) has declined 23 percent since it peaked in fiscal year 2007,  and USPS projects that it will remain roughly flat through fiscal year 2020.  Standard Mail is profitable overall, but it takes about three pieces of  Standard Mail, on average, to equal the profit from the average piece of  First-Class Mail. First-Class Mail and Standard Mail also face competition  from electronic alternatives, as many businesses and consumers have  moved to electronic payments over the past decade in lieu of using the  mail to pay bills. For the first time, in 2010, fewer than 50 percent of all  bills were paid by mail.
In addition to lost mail volume and revenue, USPS also has incurred  financial liabilities, that totaled $96 billion at the end of fiscal year 2012,  that included unfunded pension and retiree health benefit liabilities. Table  2 shows the amounts of these liabilities over the last 6 fiscal years. One  of these liabilities, USPS’s debt to the U.S. Treasury, increased over this  period from $4 billion to its statutory limit of $15 billion.  Thus, USPS can  no longer borrow to maintain its financial solvency or finance needed  capital investment.  USPS continues to incur unsustainable operating  deficits.  In this regard, the USPS Board of Governors recently directed  postal management to accelerate restructuring efforts to achieve greater  savings.
These selected USPS liabilities increased from 83 percent of revenues in  fiscal year 2007 to 147 percent of revenues in fiscal year 2012 as  illustrated in figure 2.  This trend demonstrates how USPS liabilities have  become a large and growing financial burden.
USPS’s dire financial condition makes paying for these liabilities highly  challenging.  In addition to reaching its limit in borrowing authority in fiscal  year 2012, USPS did not make required prefunding payments of $11.1  billion for fiscal year 2011 and 2012 retiree health benefits.  At the end of  fiscal year 2012, USPS had $48 billion in unfunded retiree health benefit  liabilities.
Looking forward, USPS has warned that it suffers from a severe lack of  liquidity. As USPS has reported: “Even with some regulatory and  legislative changes, our ability to generate sufficient cash flows from  current and future management actions to increase efficiency, reduce  costs, and generate revenue may not be sufficient to meet all of our  financial obligations.”  For this reason, USPS has stated that it continues  to lack the financial resources to make its annual retiree health benefit  prefunding payment. USPS has also reported that in the short term,  should circumstances leave it with insufficient liquidity, it may need to  prioritize payments to its employees and suppliers ahead of those to the  federal government.  For example, near the end of fiscal year 2011, in  order to maintain its liquidity, USPS temporarily halted its regular  contributions for the Federal Employees Retirement System (FERS) that  are supposed to cover the cost of benefits being earned by current  employees. However, USPS has since made up those missed FERS  payments. USPS’s statements about its liquidity raise the issue of  whether USPS will need additional financial help to remain solvent while it  restructures and, more fundamentally, whether it can remain financially  self-sustainable in the long term.
USPS has also raised the concern that its ability to negotiate labor  contracts is essential to maintaining financial stability and that failure to  do so could have significant adverse consequences on its ability to meet  its financial obligations. Most USPS employees are covered by collective  bargaining agreements with four major labor unions which have  established salary increases, cost-of-living adjustments, and the share of  health insurance premiums paid by employees and USPS.  When USPS  and its unions are unable to agree, binding arbitration by a third-party  panel is used to establish agreement. There is no statutory requirement  for USPS’s financial condition to be considered in arbitration. In 2010, we  reported that the time has come to reexamine USPS’s 40-year-old  structure for collective bargaining, noting that wages and benefits  comprise 80 percent of its costs at a time of escalating losses and a  dramatically changed competitive environment.Congress should consider revising the statutory framework for collective  bargaining to ensure that USPS’s financial condition be considered in  binding arbitration.
section_title: USPS Initiatives to Reduce Costs and Increase Revenues
paragraphs: USPS has several initiatives to reduce costs and increase its revenues to  curtail future net losses.  In February 2012, USPS announced a 5-year  business plan with the goal of achieving $22.5 billion in annual cost  savings by the end of fiscal year 2016. This plan included savings from a  change in the delivery schedule; however, USPS has now put all changes  in delivery service on hold, which will reduce its ability to achieve the full  5-year business plan savings. USPS has begun implementing other parts  of the plan, which includes initiatives to save: $9 billion in mail processing, retail, and delivery operations,  including consolidation of the mail processing network, and  restructuring retail and delivery operations; $5 billion in compensation and benefits and non-personnel $8.5 billion through proposed legislative changes, such as  eliminating the obligation to prefund USPS’s retiree health  benefits.  o  $2.7 billion of this $8.5 billion was estimated savings from  moving to a 5-day delivery schedule for all types of mail.  o  USPS subsequently proposed a modified reduction in its  delivery schedule, maintaining package delivery on  Saturday, with estimated annual savings of $2 billion, but  as noted, USPS has now put even this proposed change  in service delivery on hold.
Simultaneously, USPS’s 5-year plan would further reduce the overall size  of the postal workforce by roughly 155,000 career employees, with many  of those reductions expected to result from attrition. According to the plan,  half of USPS’s career employees are currently eligible for full or early  retirement.  Reducing its workforce is vital because as noted  compensation and benefits costs continue to generate about 80 percent  of USPS’s expenses.  Compensation alone (primarily wages) exceeded  $36 billion in fiscal year 2012, or close to half of its costs. Compensation  costs decreased by $542 million in fiscal year 2012 as USPS offered  separation incentives to postmasters and mail handlers to encourage  more attrition.  This fiscal year, separation incentives were offered to  employees represented by the American Postal Workers Union (e.g., mail  processing and retail clerks) to encourage further attrition as processing  and retail operations are redesigned and consolidated to more closely  correspond with workload.
Another key area of potential savings included in the 5-year plan focused  on reducing compensation and benefit costs. USPS’s largest benefit  payments in fiscal year 2012 included: $7.8 billion in current-year health insurance premiums for  employees, retirees, and their survivors (USPS’s health benefit  payments would have been $13.4 billion if USPS had paid the  required $5.6 billion retiree health prefunding payment); $3.0 billion in FERS pension funding contributions; $1.8 billion in social security contributions; $1.4 billion in workers’ compensation payments; and $1.0 billion in Thrift Savings Plan contributions.
USPS has proposed administering its own health care plan for its  employees and retirees and withdrawing from the Federal Employee  Health Benefits (FEHB) program so that it can better manage its costs  and achieve significant savings, which USPS has estimated could be over  $7 billion annually. About $5.5 billion of the estimated savings would  come from eliminating the retiree health benefit prefunding payment and  another $1.5 billion would come from reducing health care costs. We are  currently reviewing USPS’s proposal including its potential financial  effects on participants and USPS.
To increase revenue, USPS is working to increase use of shipping and  package services. With the continued increase in e-commerce, USPS  projects that shipping and package volume will grow by 7 percent in fiscal  year 2013, after increasing 7.5 percent in fiscal year 2012. Revenue from  these two product categories represented about 18 percent of USPS’s  fiscal year 2012 operating revenue.  However, USPS does not expect that  continued growth in shipping and package services will fully offset the  continued decline of revenue from First-Class Mail and other products.
We recently reported that USPS is pursuing 55 initiatives to generate  revenue. Forty-eight initiatives are extensions of existing lines of postal  products and services, such as offering Post Office Box customers a suite  of service enhancements (e.g., expanded lobby hours and earlier pickup  times) at selected locations and increasing public awareness of the  availability of postal services at retail stores.  The other seven initiatives  included four involving experimental postal products, such as prepaid  postage on the sale of greeting cards, and three that were extensions of  nonpostal services that are not directly related to mail delivery. USPS  offers 12 nonpostal services including Passport Photo Services, the sale  of advertising to support change-of-address processing, and others  generating a net income of $141 million in fiscal year 2011.   Another  area of potential revenue generation is USPS’s increased use of  negotiated service agreements that offer competitively priced contracts  as well as promotions with temporary rate reductions that are targeted to  retain mail volume.  We are currently reviewing USPS’s use of negotiated  service agreements.
As USPS attempts to reduce costs and increase revenue, its mission to  provide universal service continues. USPS’s network serves more than  152 million residential and business delivery points. In May 2011, we  reported that many of USPS’s delivery vehicles were reaching the end of  their expected 24-year operational life and that USPS’s financial  challenges pose a significant barrier to replacing or refurbishing its fleet.As a result, USPS’s approach has been to maintain the delivery fleet until  USPS determines how to address longer term needs, but USPS has been  increasingly incurring costs for unscheduled maintenance because of  breakdowns. The eventual replacement of its vehicle delivery fleet  represents yet another financial challenge facing USPS. We are currently  reviewing USPS’s investments in capital assets.
section_title: Actions Needed to Improve USPS’s Financial Situation
paragraphs: We have issued a number of reports on strategies and options for USPS  to improve its financial situation by optimizing its network and  restructuring the funding of its pension and retiree health benefit liabilities.
subsections: section_title: Network Optimization
paragraphs: To assist Congress in addressing issues related to reducing USPS’s  expenses, we have issued several reports analyzing USPS’s initiatives to  optimize its mail processing, delivery, and retail networks.
In April 2012, we issued a report related to USPS’s excess capacity in its  network of 461 mail processing facilities.  We found that USPS’s mail  processing network exceeds what is needed for declining mail volume.  USPS proposed consolidating its mail processing network, a plan based  on proposed changes to overnight delivery service standards for First- Class Mail and Periodicals. Such a change would have enabled USPS to  reduce an excess of 35,000 positions and 3,000 pieces of mail  equipment, among other things. We found, however, that stakeholder  issues and other challenges could prevent USPS from implementing its  plan for consolidating its mail processing network. Although some  business mailers and Members of Congress expressed support for  consolidating mail processing facilities, other mailers, Members of  Congress, affected communities, and employee organizations raised  concerns. Key issues raised by business mailers were that closing  facilities could increase their transportation costs and decrease service.  Employee associations were concerned that reducing service could result  in a greater loss of mail volume and revenue that could worsen USPS’s  financial condition. We reported that if Congress preferred to retain the  current delivery service standards and associated network, decisions will  need to be made about how USPS’s costs for providing these services  will be paid.
Over the past several years, USPS has proposed transitioning to a new  delivery schedule. Most recently, in February of this year, USPS  proposed limiting its delivery of mail on Saturdays to packages—a  growing area for USPS—and to Express Mail, Priority Mail, and mail  addressed to Post Office Boxes.  Preserving Saturday delivery for  packages would address concerns previously raised by some  stakeholders, such as delivery of needed medications. USPS estimated  that this reduced Saturday delivery would produce $2 billion in annual  savings after full implementation, which would take about two years to  achieve, and result in a mail volume decline of less than one percent.  Based on our 2011 work,February 2013 estimate, we note that the previous and current estimates   and recent information from USPS on their  are primarily based on eliminating city and rural carrier work hours on  Saturdays.  In our prior work, stakeholders raised a variety of concerns  about these estimates, several of which are still relevant. For example,  USPS’s estimate assumed that most of the Saturday workload transferred  to weekdays would be absorbed through more efficient delivery. USPS  estimated that its current excess capacity should allow it to absorb the  Saturday workload on Monday. If that is not the case, some of the  projected savings may not be realized. Another concern stakeholders  raised was that USPS may have underestimated the size of the potential  volume loss from eliminating Saturday delivery due to the methodology  used to develop its estimates. Since mail volume has declined from the  prior estimate, the accuracy of the estimated additional impact of  eliminating Saturday delivery is unclear. The extent to which USPS would  be able to achieve its most recent estimate of $2 billion in annual savings  depends on how well and how quickly it can realign its workforce and  delivery operations. Nevertheless, we agree that such a change in  USPS’s delivery schedule would likely result in substantial savings.
A change to 5-day service would be similar to changes USPS has made  in the past.  USPS is required by law to provide prompt, reliable, and  efficient services, as nearly as practicable. The Postal Regulatory  Commission (PRC) has reported that delivery frequency is a key element  of universal postal service. The Postal Service’s universal service  obligation is broadly outlined in multiple statutes and encompasses  multiple dimensions including delivery frequency. Other key dimensions  include geographic scope, range of products, access to services and  facilities, affordable and uniform pricing, service quality, and security of  the mail.  The frequency of USPS mail delivery has evolved over time to account for changes in communication, technology, transportation, and  postal finances. The change to 5-day service would be a similar change.  Until 1950, residential deliveries were made twice a day in most cities.  Currently, while most customers receive 6-day delivery, some customers  receive 5-day or even 3-day-a-week delivery, including businesses that  are not open 6 days a week; resort or seasonal areas not open year- round; and areas not easily accessible, some of which require the use of  boats, airplanes, or trucks.
Following USPS’s most recent proposed change in delivery in February  2013, we issued a legal opinion concerning the proposal in response to a  congressional request. As requested, we addressed whether a  requirement contained in the USPS’s annual appropriations acts for the  past three decades and contained in its fiscal year 2012 appropriations  act—that it continue 6-day delivery of mail “at not less than the 1983  level”—was still in effect under the partial year Continuing Appropriations  Resolution.  We concluded that the Continuing Resolution carried  forward this requirement, explaining that absent specific legislative  language, a continuing resolution maintains the status quo regarding  government funding and operations. Although the 6-day delivery proviso  is an operational directive, not an appropriation, we saw no language in  the Continuing Resolution to indicate that Congress did not expect it to  continue to apply. The full-year 2013 Continuing Resolution that  Congress then enacted on March 21, shortly after we issued our opinion,  which provided funding through the end of fiscal year 2013, likewise has  continued the effectiveness of the 6-day proviso.
On April 10, 2013, the USPS Board of Governors announced that based  on the language of the March 21, 2013, Continuing Resolution, it would  delay implementation of USPS’s proposed delivery schedule until  legislation is passed that provides it with the authority “to implement a  financially appropriate and responsible delivery schedule.” By statute, the  Board directs the exercise of the power of the Postal Service, directs and  controls the Postal Service’s expenditures, and reviews its policies and  practices.   Thus, the Board, which has the lead responsibility for taking  actions within the scope of the Postal Service’s existing statutory authority  to maintain its financial solvency, has determined that full 6-day service  will continue for the present time.
In April 2012, we reported that USPS has taken several actions to  restructure its retail network—which included almost 32,000 postal  managed facilities in fiscal year 2012—through reducing its workforce and  its footprint while expanding retail alternatives. We also reported on concerns customers and other stakeholders have expressed regarding  the impact of post office closures on communities, the adequacy of retail  alternatives, and access to postal services, among others. We discussed  challenges USPS faces, such as legal restrictions and resistance from  some Members of Congress and the public, that have limited USPS’s  ability to change its retail network by moving postal services to more  nonpostal-operated locations (such as grocery stores), similar to what  other nations have done.  The report concluded that USPS cannot  support its current level of services and operations from its current  revenues. We noted that policy issues remain unresolved related to what  level of retail services USPS should provide, how the cost of these  services should be paid, and how USPS should optimize its retail  network.
In November 2011, we reported that USPS had expanded access to its  services through alternatives to post offices in support of its goals to  improve service and financial performance and recommended that USPS  develop and implement a plan with a timeline to guide efforts to  modernize USPS's retail network, and that addresses both traditional post  offices and retail alternatives as well. We added that the plan should also include:   (1) criteria for ensuring the retail network continues to provide adequate  access for customers as it is restructured;   (2) procedures for obtaining reliable retail revenue and cost data to  measure progress and inform future decision making; and   (3) a method to assess whether USPS's communications strategy is  effectively reaching customers, particularly those customers in areas  where post offices may close.
In November 2012, we reported that although contract postal units  (CPUs)—independent businesses compensated by USPS to sell most of  the same products and services as post offices at the same price—have  declined in number, they have supplemented post offices by providing  additional locations and hours of service.
More than 60 percent of CPUs  are in urban areas where they can provide customers nearby alternatives  when they face long lines at post offices. In fiscal year 2011, after  compensating CPUs, USPS retained 87 cents of every dollar of CPU  revenue. We found that limited interest from potential partners, competing  demands on USPS staff resources, and changes to USPS's retail network  posed potential challenges to USPS's use of CPUs.
section_title: Addressing USPS Benefit Liabilities
paragraphs: To assist Congress in addressing issues related to funding USPS’s  liabilities, we have also issued several reports that address USPS’s  liabilities, including its retiree health benefits, pension, and workers’  compensation.
In December 2012, we reported that USPS’s deteriorating financial  outlook will make it difficult to continue the current schedule for  prefunding postal retiree health benefits in the short term, and possibly to  fully fund the remaining $48 billion unfunded liability over the remaining  decades of the statutorily required actuarial funding schedule.   However, we also reported that deferring funding could increase costs for  future ratepayers and increase the possibility that USPS may not be able  to pay for some or all of its liability. We stated that failure to prefund these  benefits is a potential concern. Making affordable prefunding payments  would protect the viability of USPS by not saddling it with bills later on,  when employees are already retired and no longer helping it generate  revenue; it can also make the promised benefits more secure.  Thus, as  we have previously reported, we continue to believe that it is important for  USPS to prefund these benefits to the maximum extent that its finances  permit.  We also recognize that without congressional or further USPS  actions to align revenue and costs, USPS will not have the finances  needed to make annual payments and reduce its long term retiree health  unfunded liability. No funding approach will be viable unless USPS can  make the required payments.
We reported on options with regard to the FERS surplus, noting the  degree of uncertainty inherent in this estimate and reporting on the  implications of alternative approaches to accessing this surplus.estimated FERS surplus decreased from 2011 to 2012, and at the end of    The  fiscal year 2012, USPS had an estimated FERS surplus of $3.0 billion  and an estimated CSRS deficit of $18.7 billion.
In 2012, we reported on workers’ compensation benefits paid to both  postal and nonpostal beneficiaries under the Federal Employees’  Compensation Act (FECA).  USPS has large FECA program costs. At  the time of their injury, 43 percent of FECA beneficiaries in 2010 were  employed by USPS.  FECA provides benefits to federal workers who  sustained injuries or illnesses while performing federal duties and benefits  are not taxed or subject to age restrictions.  Various proposals to modify  FECA benefit levels have been advanced.  At the request of Congress,  we have provided information to assist them in making decisions about  the FECA program.
section_title: Concluding Observations
paragraphs: In summary, to improve its financial situation, USPS needs to reduce its  expenses to close its gap between revenue and expenses, repay its  outstanding debt, continue funding its retirement obligations, and increase  capital for investment, such as replacing its aging vehicle fleet. In  addition, as noted in prior reports, congressional action is needed to (1)  modify USPS’s retiree health benefit payments in a fiscally responsible  manner; (2) facilitate USPS’s ability to align costs with revenues based on  changing workload and mail use; and (3) require that any binding  arbitration resulting from collective bargaining takes USPS’s financial  condition into account.  As we have continued to underscore, Congress  and USPS need to reach agreement on a comprehensive package of  actions to improve USPS’s financial viability. In previous reports, we have  provided strategies and options, to both reduce costs and enhance  revenues, that Congress could consider to better align USPS costs with  revenues and address constraints and legal restrictions that limit USPS’s  ability to reduce costs and improve efficiency; we have also reported on  implications for addressing USPS’s benefit liabilities. If Congress does not  act soon, USPS could be forced to take more drastic actions that could  have disruptive, negative effects on its employees, customers, and the  availability of reliable and affordable postal services.
Chairman Issa, Ranking Member Cummings, and Members of the  Committee, this concludes my prepared statement. I would be pleased to  answer any questions that you may have at this time.
section_title: GAO Contact and Staff Acknowledgments
paragraphs: For further information about this statement, please contact Lorelei St.  James, Director, Physical Infrastructure, at (202) 512-2834 or  stjamesl@gao.gov. Contact points for our Congressional Relations and  Public Affairs offices may be found on the last page of this statement. In  addition to the contact named above, Frank Todisco, Chief Actuary;  Samer Abbas, Teresa Anderson, Barbara Bovbjerg, Kyle Browning, Colin  Fallon, Imoni Hampton, Kenneth John, Hannah Laufe, Kim McGatlin,  Amelia Shachoy, Andrew Sherrill, and Crystal Wesco made important  contributions to this statement.
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