July 20, 2015
Last week the Congressional Budget Office (CBO) provided an estimate for how much it would cost the Postal Service to return to the service standards that were in effect on July 1, 2012.
Going back to these standards for delivery times is one of the provisions in a proposed amendment attached to the FY 2016 appropriations bill drafted by the House Appropriations Committee. Senator Tom Carper asked the CBO to prepare an estimate for how much it would cost to comply with the amendment.
According to the CBO’s letter to Senator Carper, “Based on preliminary information from the Postal Service, we expect that it would cost well over $1 billion in 2016 for USPS to attempt to fully comply with the amendment.”
The CBO says that going back to the earlier standards would probably not even be possible because the Postal Service doesn’t have that kind of money. The most it could spend to improve delivery times next year is about $300 million.
According to the CBO, in order to return to the earlier service standards, the Postal Service would need to add work hours, reopen facilities that have been closed or sold, and replace equipment it no longer owns.
The CBO offers to provide Senator Carper with further details on the $1 billion price tag, but the letter itself does not explain how the number was arrived at.
If you look at what’s happened over the past few months, the $1 billion doesn’t seem credible, and one wonders if the CBO has misunderstood what the amendment is all about.
Fattah Amendment Letter: