Last month, the U.S. Postal Service announced the retirement of Postmaster General Megan J. Brennan. The announcement comes prior to the release of the service’s 2019 financials and in the midst of the waiting game for the agency to release its long-overdue business plan.
Brennan is retiring effective January 31, 2020, having held the position for nearly five years. As the 74th postmaster general, Brennan has no doubt witnessed the booming growth in e-commerce and its effects on the Postal Service, but there has been a long string of financial and managerial hurdles the agency has yet to rectify. New leadership must understand the unique challenges facing the servicer and steer the agency away from bailouts and bankruptcy.
From the service’s burgeoning net losses ($23.2 billion as of the most recent quarterly financial report) to the unprecedented illicit drug deliveries that forced Congress to intervene with the STOP Act of 2018, Brennan has endured a number of fiascos during her tenure. Most alarmingly, consumers lost confidence in the security of their data, after a major security breach exposed more than 60 million consumers’ personal information.
Postal Service leadership responded to these unprecedented challenges by hitting mail customers with the largest stamp price increase in the history of the agency, though federal courts have wisely challenged the service to finance their services without gouging stamp buyers. Agency leadership sees taxpayer funds as another way to shore up the beleaguered agency as the service and misguided lawmakers attempt to pass off agency debts to Medicare (a program that already has trillions of dollars in unfunded obligations).
Taxpayers and consumers were promised a business plan that would help the agency stem the tide of red ink, but that blueprint is now more than 100 days late and counting.
The newly elected postmaster general should make it a priority to reduce the mismatch of workhour budgets and staff level/assignment determinations and unnecessary overtime hours, which could save $420 million per year, according to a 2019 report by the Taxpayers Protection Alliance. Additionally, the new postmaster general should reign in highway contract “chargeable irregularities” by making more complete reviews of these contracts and requiring greater paperwork sharing between managers at different facilities. Reigning in middle-mile malfeasance would save the service more than $1 billion per year.
Further priorities should include addressing administrative actions outlined by the Task Force on the USPS. This would entail serious efforts to price competitive products in a manner that maximizes revenues and develop a new cost allocation model to establish full pricing transparency. Finally, the agency should pave the way for pricing or service changes for mail products that are not deemed an essential service and do not cover their direct costs. The aforementioned issues continue to rear their ugly head and have caused the agency significant financial losses every quarter for the last 12 years.
Led by Robert M. Duncan, current governors of the USPS board will elect the new postmaster general in the coming weeks. In selecting a new leader, the governors should make a concerted effort to elect someone who is not only well-versed in the industry but also someone with strong financial management skills who can actively work with the agency to overhaul the managerial and fiscal issues that have been plaguing the service for nearly a decade.
Taxpayers and consumers deserve a postmaster general who will proactively work to clean up the agency’s woeful accounting processes, analyze the long-term viability of all of its services, and strive for a firmer fiscal footing. Maintaining the status quo is simply indefensible for the Postal Service and a burden to taxpayers who are inevitably on the hook to bail out the beleaguered agency. New leadership should resolve to keep the mail flowing while rooting out the waste and inefficiencies that have come to define the service.
