USPS financially imploding as new political scandal emerges

Packages wait to be sorted in a Post Office in Atlanta. (AP/David Goldman)

The United States Postal Service is under fire Wednesday for allegedly violating the law by allowing its employees to do union-funded activities for Hillary Clinton’s campaign, according to an Office of Special Counsel report obtained by Fox News.

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The OSC claims the USPS workers’ activities violate the Hatch Act, which prohibits federal workers from engaging in certain politically-oriented undertakings.

As the U.S. Postal Service seeks to mediate these new damaging allegations, saying Wednesday it will "fully implement" the recommendations of the OSC, it is still backlogged with a slew of other financial problems. Here’s a look at its top challenges.

Red ink

Expenses at the United States Postal Service have outpaced revenue for the past 10 years. In fiscal year 2016, the federal agency recorded a net financial loss of $5.6 billion and in the year prior, that amount clocked in at $5.1 billion. According to the House Committee on Oversight and Government Reform, the postal service has accrued $62 billion in losses over the past decade.

Prior to 2007, USPS had experienced 30 years of relatively steady growth, according to a U.S. Government Accountability Office report.

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The agency also has $15 billion in outstanding debt, which is the statutory limit.

Unfunded liabilities

In addition to mounting financial losses, the Postal Service has more than $120 billion in unfunded liabilities, mainly for retiree health and pension benefits, according to the GAO report. This amounts to 169% of fiscal year 2016 revenues. Unfunded liabilities have been at more than 150% of revenues since 2011.

Mandated retiree benefits were partly credited with USPS’ fiscal year 2016 $5.6 billion net financial loss, according to a company press release.

The agency counted more than 508,000 employees on its payroll in 2016.

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Mail volume

Overall mail volume moving through the agency has been decreasing steadily over the past 10 years. From 2007 to 2016, total mail volume has decreased nearly 30%. While shipping package volume has increased during the same time period, up more than 15% in 2016 alone, revenues acquired from packages have not been enough to make up for what the Postal Service is losing. In fact, costs associated with increased shipping package volumes were listed by the company as a snowballing expense during the last fiscal year.

Reform

"We believe that the [financial] situation is serious but solvable," a USPS spokesperson said in a statement to FOX Business Wednesday. "The path forward includes continued innovation and aggressive management actions, the passage into law of postal reform legislation and a favorable outcome in the Postal Regulatory Commission’s 10-year review of the Postal Service’s pricing system."

The House Committee on Oversight and Government Reform voted to advance The Postal Reform Act of 2017 in March, in order to provide relief to the agency. However, the bill – sponsored by the Committee’s former Chair Rep. Jason Chaffetz (R-Utah)— could be dead now that Chaffetz has resigned from Congress. Lawmakers also have a multitude of other pressing issues to address, including health care reform, raising the debt limit and passing a budget, before the onset of the new fiscal year in October.

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