In what is widely seen as a slight against the regulatory agency, the U.S. Postal Service Board of Governors recently unanimously approved a meager $21.124 million budget for the Postal Regulatory Commission (PRC).
The board insists this new budget “is sufficient for the PRC to fulfill its regulatory mandate.” However, it is less than the PRC’s initial budget request of $23.4 million and later adjusted request of $22.6 million following discussions with the Board of Governors. It is also less than what the PRC says it needs next year to cover its $2 million increase in operating costs and oversee an agency with an estimated 630,000 employees.
In a statement, PRC Chairman Michael Kubayanda said he is “disappointed” that the Postal Service declined to fund the commission’s modest budget request, noting it would represent “less than 0.03 percent of Postal Service revenues.”
The PRC is right to be disappointed. The 2024 budget allocation threatens to degrade the commission’s capabilities, delay technology upgrades, and potentially lead to the elimination of staffing positions. Perhaps that is precisely the point.
Last year, Congress passed the Postal Service Reform Act of 2022 to address the “finances and operations” of the service. While such reforms are welcome news, considering the agency’s chronic mismanagement and 15 straight years of financial losses, Congress nonetheless made the foolish decision to transfer the approval process for the PRC’s annual appropriation to the Postal Service. Previously, the PRC’s budget was approved by the Office of Management and Budget and included in the president’s annual budget. This was done to “ensure the PRC’s independence,” and allow it to keep operating even during government shutdowns. Unfortunately, the PRC is now at the mercy of the entity that Congress tasked it with monitoring.
The Postal Service recently embarked on an ambitious plan to implement Postmaster General Louis DeJoy’s Delivering for America (DFA) 10-year plan, which seeks to put the agency on better financial footing. While such a plan is admirable, the Postal Service has failed to turn things around, having already lost $5.8 billion in the first three quarters of 2023. It is not surprising to learn that the PRC has launched an investigation of the Postal Service’s DFA plan, specifically regarding network changes.
However, the commission says it needs more money and resources to keep pace with that investigation and other changes underway at the Postal Service. The fact that the PRC needs its budget approved by the service to make this happen is an obvious problem that the service seems little interested in helping them address.
The Comptroller General warned about this possibility in a 2020 Government Accountability Office report, noting that “the potential exists for the abuse by the Postal Service’s Board of Governors of its approval authority over the amount the commission can spend.” Therefore, the “scope of activities of the Commission should not be subject to the perceptions of the Governors.”
The report recommended that while the commission’s expenses can continue to be met by the Postal Fund, “any changes” to the original budget request should be specifically “approved by Congress.” This is sound advice that Congress should take to heart.
The PRC was established, at least in part, to ensure that the Postal Service does not abuse its authority. If Congress wants the PRC to succeed in that task, it must strongly consider reclaiming its power to approve commission budget requests. After all, it is Congress’s constitutional responsibility to manage budget issues. At the very least, Congress should remind the service that failing to provide the PRC with the resources necessary to carry out its responsibilities will result in the immediate loss of the Postal Service budget authority over PRC matters.
Not everything the PRC does moving forward will please the Postal Service, and that’s OK. The point is the service needs to allow the commission to carry out its regulatory mission as directed by Congress. Greater transparency and accountability will go a long way toward restoring the public’s confidence in the postal service. Providing the PRC with the budget to cover its costs is a good first step toward making that happen.
