WASHINGTON, D.C. – Today, U.S. Senator Rand Paul (R-KY), Ranking Member of the Senate Homeland Security and Governmental Affairs Committee, highlighted the continued failures of the United States Postal Service (USPS) to meet the service and delivery goals for the American people. During a hearing titled “Oversight of the United States Postal Service,” Dr. Paul spoke about the need for Congress to stop throwing more tax dollars at the Postal Service until significant structural labor changes are made to its workforce hiring and retention processes.
Dr. Paul discussed how after receiving over $120 billion in taxpayer dollars since 2020, the Postal Service has continued to lose billions each year despite promising to improve operational costs and delivery standards. Of the $120 billion, $107 billion came from a Congressional bailout, where the Postal Service promised operations would break even within a few years. However, the Postal Service has fallen far below these goals, highlighted by a net loss of $6.5 billion for FY 2023. In 2020, Dr. Paul argued that no funding should be given unless the USPS changed its labor practices. These important reforms have been clearly missing as even with continued declining revenue and labor productivity, the Postal Service has added more employees to their costly pension system and converted more than 125,000 workers into permanent, unionized positions, which incur significant pension and healthcare obligations.
Additionally, USPS is spending $9.6 billion on electric delivery trucks and nearly $40 billion to convert and build certain facilities into hubs that so far don’t work. Dr. Paul pointed out that private businesses would handle these lingering labor costs by adjusting and making cuts where necessary rather than continuing to throw more money at the issue. The Postal Service’s dismal fiscal conditions only become more reckless when considering the nearly $35 trillion debt that is damaging the nation. Dr. Paul called on Congress to stop throwing taxpayer dollars at the money-burning USPS and for the Postal Service to undergo massive structural reform to balance its finances and reach its statutorily required financial independence.
View the Ranking Member’s opening statement here and questioning here.
Opening remarks as prepared below:
In an 1808 letter, Thomas Jefferson shared simple wisdom that seems to have evaded the federal government. “I do not know on what principles of reasoning it is that good men think the public ought to pay more for a thing than they would themselves if they wanted it.” It is those principles of reasoning or, rather, the lack thereof that bring us here today.
In 2020, Congress was led to believe that the $107 billion bailout in the Postal Service Reform Act provided would pull the Postal Service out of the hole it was in within 3 or 4 years. We were also told that USPS operations would break-even by 2031. Postmaster General DeJoy sat in front of this committee in August of that year and stated, “I am absolutely convinced that with some help from Congress and our regulator, we can do it, and that there is a bright future ahead for the Postal Service.” I argued that giving more money to the Postal Service was equivalent to burning money. However, that may have been a false equivalency because at least burnt money provides warmth.
Given the continued financial shortfalls of the Postal Service, it is entirely nonsensical for it to convert more than 125,000 Service workers into career roles since October 2020, which effectively allows those workers to make 50% more hourly and is insourcing jobs that were provided at lower cost by private partners. During the Postal Service Reform Act, I argued no funding should be given to USPS without changes to its labor practices. Instead, no labor changes were made and now Americans are left holding the bag of an ever more bloated Postal Service.
The Service has tried to explain away these bad numbers due to “costs that [the USPS] cannot control.” But the Service is spending $9.6 billion in electric delivery vehicles and spending nearly $40 billion over 10 years to convert and build certain facilities into hubs that so far do not work.
This hasn’t stopped Congress from throwing even more money at the Postal Service. For those counting, that’s $120 billion in funding and relief in the past 4 years alone.
While $120 billion is already an astounding number on its own, when you consider this sum relative to our nation’s dismal fiscal condition it suddenly becomes reckless. We have nearly $35 trillion in debt, or 122 percent of GDP. This is the highest level of debt this nation has ever had and we show no signs of slowing down adding nearly $1 trillion to our national debt every 100 days. This year, we have already spent more to pay the interest on our debt than we have on our own defense.
Now the Postal Service is asking Congress to provide it with an additional $14 to $100 billion in taxpayer dollars by transferring funds from the Office of Personnel Management to USPS. At some point Congress needs to pull its head out of the sand and stop throwing money we don’t have at an agency to maintain status quo, especially when status quo means more deficits. USPS needs massive structural reform, not necessarily in its network, but in its workforce hiring and retention.
Today’s hearing will provide Americans transparency in what their dollars are funding, in why their Postal Service is not meeting their service and delivery goals and it will reveal Congress’s lack of prudence in legislative decision making.
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