Chapter 1: What financial crisis is the USPS currently facing?
Should we expect the Postal Service to make money? For Marketplace, I'm Nancy Marshall-Genzer, in for David Brancaccio. The Postal Service says it's facing a severe financial crisis. Postmaster General David Steiner testified before a House subcommittee this week. He said the USPS was struggling and could be out of cash in less than 12 months unless something changes.
Marketplace's Carla Javier has more.
Chapter 2: How much money did the USPS lose last fiscal year?
The USPS says it lost $9 billion last fiscal year.
I remember when the average losses were $4.5 or $5 billion, but now the losses are increasing over time.
That's Rick Geddes at Cornell. On the cost side, he says USPS has a universal service obligation.
It's basically to deliver the mail to every address it can, six days a week. And that can get expensive. to have all the trucks run six days a week, to have the carriers who walk their routes.
On the revenue side, lawyer and consultant Jim Campbell says letter volume has gone down precipitously, and legislation limits the Postal Service's ability to raise prices. So a combination of the price cap and the declining volumes hit the post office quite hard.
The Postmaster General said Congress and the USPS could consider reducing the days of delivery, closing offices in rural or remote areas, raising stamp prices to a dollar or more, or significant financial reforms. But with revenues unlikely to exceed costs, James O'Rourke at Notre Dame says Congress has to decide if it wants a postal service at all.
We don't ask the Forest Service or the Weather Service to make money. They are a service to the people of the United States. It would be nice if the Postal Service could break even or at least come close.
But that, O'Rourke says, would take some heavy lifting on Congress's part. I'm Carla Javier for Marketplace.
The Education Department is offloading part of its student loan portfolio. The Treasury Department will take over management of defaulted student loans, where borrowers are months behind on their payments. It's the Education Department's first step towards shedding management of all federal student loans. The Trump administration plans to shutter the agency.
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Chapter 3: What are the main challenges affecting USPS revenue?
The Middle East is a major fertilizer producing region, according to Julia Meehan with ICIS.
There is a huge volume that's not making it through to the customer. And this is all at a time when we are in peak season for application for the U.S., for Europe, for India.
And she says this could ultimately reduce demand for fertilizer.
If this conflict continues in the Middle East, I think these prices will go higher. But to what point will then the farmer say, enough is enough. We can't afford this anymore.
Cutting down on fertilizer would hurt crop yields, and that could eventually trickle down to higher food prices for consumers. I'm Elizabeth Troval for Marketplace.
Marketplace exists to help you stay informed about the economy, and you can put that knowledge to the test. Every Friday, we publish a news quiz online. Find it on our website, marketplace.org slash quiz. Our executive producer is Nancy Farghali. Our digital team includes Antoinette Brock, Emily McKeown, and Dylan Miettinen.
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Chapter 4: What potential reforms could help the USPS become profitable?
Our engineers are Tessa Block and David Schreck. In Washington, I'm Nancy Marshall-Genzer with the Marketplace Morning Report. From APM, American Public Media.
I'm Rima Grace, and this week on my podcast, This is Uncomfortable, we're looking at the rise of prediction markets, where you can bet on everything from sports and pop culture to political headlines. A multi-billion dollar industry that's growing at a time when more Americans are questioning the traditional paths to wealth.
I feel like the kind of quote unquote American dream is sort of breaking down. Like, how could I possibly, you know, buy a home, be able to afford having a family? And then they're also going online and seeing people that are claiming to make all this money doing these alternative paths to wealth.
Be sure to listen to this week's episode of This is Uncomfortable on your favorite podcast app.