The U.S. Postal Service is incurring unsustainable deficits and its financial condition has been classified as high-risk, according to a Government Accountability Office report.
The Postal Service incurred a net loss of $5.1 billion in fiscal year 2015, the ninth year in a row the post office incurred losses. The federal watchdog first placed the service on its high-risk list in July 2009, where it remains today today.
The report finds that the agency’s financial condition continues to worsen because of two major factors: declining mail volume and rising expenses.
The volume of First-Class Mail, a major source of revenue for the service, is expected to decline as electronic alternatives are available for communication and payment of bills. In addition, the agency’s expenses, including salary and benefits, are increasing at an unsustainable rate.
“USPS’s financial condition makes it unlikely it will be able to fully make its required retiree health and pension payments in the near future,” the report states. “Large unfunded liabilities for postal retiree health and pension benefits—which were $78.9 billion at the end of fiscal year 2015—may ultimately place taxpayers, USPS employees, retirees, and their beneficiaries, and USPS itself at risk.”