June 18, 2020
Three senior Republicans responsible for House and Senate oversight of USPS wrote a letter June 8 to then-Postmaster General Megan Brennan requesting “…that the United States Postal Service (USPS) revise its projections for the direct impact of COVID-19. In the first eleven weeks of the crisis, USPS revenues were $330,414,152 higher than the same period last year, a much different result than what USPS projected.”
The Members of Congress noted that the $89 billion bailout package urgently requested by the USPS relied on a forecasted loss of $13 billion directly attributed to Covid-19 from April through September, at which time the Postal Service would be illiquid.
While expressing doubts that the projections are now accurate, the authors of the letter noted the importance of cash: “The simplest metric to determine the impact of unexpected revenues and costs is USPS’s cash position. USPS started the crisis with $9.2 billion in cash, and as of June 4th, had $13.2 billion. While USPS availed itself of $3.4 billion in additional cash through short-term notes on April 3rd, even without those notes, USPS’s cash position has improved by at least $600 million.”
The Alliance has urged nonprofit mailers throughout the crisis not to assume the disastrous USPS prognostications were accurate. We have done so in Alliance Reports and Alliance Alerts. Most nonprofit mailers have stayed active in the mail, and many have increased their mailings as they play major roles in helping our nation with the twin crises of coronavirus and Black Lives Matter.
We expect that the releases in the coming days of a new forecast and the preliminary financial results for May will bear out our view that USPS is nowhere near a crisis of liquidity or discontinuing operations. Our postal agency continues, however, with the longstanding problem of how to adequately fund its costs in an environment of changing mailing preferences and declining volumes. That’s the challenge Louis DeJoy has just embraced.