U.S. Postal Service: Actions Needed to Stave off Financial Insolvency Page: 3 of 22
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Chairman Lieberman, Senator Collins, and Members of the Committee:
I am pleased to be here today to participate in this hearing focused on the
challenges facing the U.S. Postal Service (USPS). USPS is in a serious
financial crisis, and as mail volume continues to decline, it has not
generated sufficient revenue to cover its expenses and financial
obligations. In less than a month, USPS officials project that it will be
insolvent and default on its statutorily-mandated retiree health payment.
USPS has concluded that extraordinary steps must now be taken to
restore it to sound financial footing. Critical decisions by Congress and
USPS are needed to both avoid this projected default of the largest
federal civilian employer and address USPS's financial and operational
This testimony discusses (1) updated information on USPS's financial
crisis and (2) our review and analysis of proposals to address this crisis
that include pending congressional legislation and recent USPS
proposals that would allow it to withdraw from the federal health benefit
program and sponsor its own program, change the pension program for
new hires, and accelerate its network and workforce optimization efforts.
The testimony is based primarily on our review of pending legislation,
GAO's past and ongoing' work, as well as GAO's review of USPS's
recent financial results and our discussions with senior postal officials
regarding USPS's recent proposals.
We performed this work from August 2011 to September 2011 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.
1We have several ongoing reviews that are assessing USPS's plans and actions to (1)
close retail facilities; (2) expand access to retail alternatives operated by private
contractors; (3) reduce mail processing excess capacity and close unneeded facilities; and
(4) consolidate area and district administrative offices.
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United States. Government Accountability Office. U.S. Postal Service: Actions Needed to Stave off Financial Insolvency, text, September 6, 2011; Washington D.C.. (digital.library.unt.edu/ark:/67531/metadc292869/m1/3/: accessed November 18, 2018), University of North Texas Libraries, Digital Library, digital.library.unt.edu; crediting UNT Libraries Government Documents Department.