your loss and the service of your family members. thank you very much. >> i can't add anymore. it brings back the thought, you know, one of the things that is seared in my mind is when i went to iraq, actually i went to iraq at the request of fox news to do an assessment of how bad the war was doing for roger ailes in 2003 and 2006. i was flying in and out of kuwait and there were american body bags in the cargo plane. young kids who lost their lives in iraq. no one cared whether they were democrat or republican. we have made some terrible mistakes in foreign policy, invasion of iraq was a terrible error. the battle against isis and al qaeda is a war that will never be won. we can never declare victory. it's the scourge of the 20th and 21st century. the attack in france a few days ago in the strassberg market incited and inspired by isis. if the american people knew how many attacks could have occurred in the united states this year by isis inspired lone wolves

they would be shocked. our job is to continue to protect them. >> ambassador ginsberg, thank you for being with us. come back again. >> thank you. >> each week in this segment of the washington journal we take a look at how your money is at work in a different federal program. this week we return to the topic of the u.s. postal service in light of a new white house effort to reform usps. back at our desk, kevin cosar, at the institute, long-time researcher and student of all things usps. when is the last time the postal service was not in the red? >> not in the red? oh, it's been more than a decade. the postal service has financially struggled year after year, in part because of mail volume dropping. there were something like 213 billion pieces of mail being delivered by the postal service ten years ago and that number is

down to under 150 billion. that's a huge drop and that means a big drop in revenue which makes it hard to run a profit. >> what is the us ps task force? >> it was something president trump ordered to be set up by executive order and directed the treasury to look into the postal service and examine its business model and finances and ask basic questions about how can this organization be made viable for the 21st century. >> here are some of the answers to some of the questions that were asked. here's some numbers from the report. the usps is forecast to lose tens of billions of dollars over the next decade, further as of the end of fiscal 2018, the usps balance sheets reflect liabilities against $27 billion in assets and net dieficiency. start with the operating loss and the reasons for those. >> well, the postal service has a huge labor intensive network. think about it, it has to deliver to just about every

business and every home in the united states six days per week. that's a massive network. it's one that's growing every year as our population gets bigger and more homes get built, more businesses get opened. the postal service has to go there and law requires them to do it six days per week. the postal service has to employ mostly unionized labor. labor unions, no surprise, do want to do the best they can for their members, and so they bargain hard for them. that means rising labor costs. >> as we talk about the financial condition of the postal service in this segment, line for postal workers, 202-748-8002. otherwise our phone lines split up regionally, 202-748-8000, mountain or pacific, 202-748-8001. start calling in now as we continue to go through that report, the liabilities, the $89 billion in liabilities, what are the biggest ones?

>> well, much of it is retiree health benefits. these are things that the postal service has promised to do for postal workers when they retire. instead of putting aside money ahead of time in order to be ready for these benefit costs, the postal service for the longest time just tried to pay out of pocket each year for them. then in 2006, congress passed a law and said no, you are facing a financial armageddon and you need to set aside money for this. so the postal service was forced to prefund its retiree health care benefits for a few years, but it simply quit paying into the fund which means that obligation unfortunately is going to grow bigger and bigger and the big kind of existential threat here is that money runs out of the fund and then the postal service has to be bailed out by taxpayers. >> some numbers i will throw out. usps unfunded payments in 2018, $3.7 billion for normal retiree

health benefit obligations. $815 million in costs for retiree health benefit unfunded liabilities. payments to the federal employee retirement system. $1.4 billion for unfunded liabilities to the civil service retirement system. >> yeah. the postal service has a wide range of debt. the calculations i've seen, actually put it over at $130 billion of unfunded debt. they have $13 billion that they borrowed directly from the treasury to fund day-to-day operations, they have unfunded pension obligations, they have retiree health benefit obligations. there's another issue, postal service vehicles. they have a fleet of more than 180,000 vehicles and a lot of those are more than 30 years old. they're breaking down. the maintenance costs are going up. some of them are catching fire. there's a youtube video as you can see of vehicles bursting into flames. that's a capital cost they have

to deal with. to say nothing of the 30 some thousand post offices they run and retail centers out there. >> the treasury department report released and what we've been talking about here is entitled usps, a sustainable path forward. is there one? >> there is one. the postal service is the only entity in america that goes to everyone's home and goes to all these businesses. it has business what's called final mile capability that is unmatched anywhere else. the trick is to figure out how to use that capacity and to not spend a bunch of money on other aspects of the business. >> ken kosar is our guest the next half hour if you want to join the conversation with the r street institute for viewers that don't know, what is the r street institute. >> we work on a variety of issues including criminal justice, national security, technology, congressional reform, and, of course, postal.

>> where did your interests in the postal service come from? >> back in 2003 i came to washington, d.c., to work at the congressional research service, a nonpartisan unit inside the library of congress that helps members of congress and congressional committees and i had a supervisor who worked on postal reform and asked if i would back him up. i'm the new guy, why not do it. two years later he retired and i became the head of postal work at crs. >> with us this morning, taking your questions about postal reform. the financial state of usp, s. the line for workers if you're not working right now, 202-748-8002 the number to call in with your questions. otherwise the lines split up. john is in south carolina, up first this morning. go ahead. >> caller: yes. looking at this man this morning, i think he don't know what he's talking about. the postal service was originally set up like the

military, you know. your mail was free. it wasn't set up to make a profit. the postal service does make a profit. i mean, the government is sitting on $55 billion of the postal money. you know, you sit there and you're saying this and saying that, you want to privatize it because the postal service makes money. >> john, so i understand, what is the $55 billion you're referring to? >> caller: he knows what i'm talking about. it's the money that the postal service was making years ago and -- >> that's john in south carolina. >> sure. there is $55 billion, maybe closer to 50, in the retiree health benefits fund. that was money that postal service was required to put aside and also a big cash infusion that congress made towards that fund.

the idea is that money is supposed to be there and to be drawn upon each year by the postal service to fund retirees' health benefits. the problem is the cost of retiree health benefits are about twice as much as that 50 some billion dollars, which means there's a big chunk of change that is needed in order to cover those costs. >> is the white house and congress on the same page with these reforms? is this -- the reforms that we're going to be talking about this morning, something that has to be passed by congress or the white house can do it on its own? >> the white house has put together a plan that requires congressional action. there would have to be a major postal reform law passed. this plan is just a piece of paper, a discussion document, and most certainly there's going to be a lot of things in it that congress is going to object to. >> what do you think some of those things are? >> one of the things it suggests is that we should not do six day a week mail anymore. a lot of folks in rural areas or

their representatives and senators will complain about that. the report suggests that we abolish collective bargaining for union employees. that's not going to go over well. and it also suggests that to bring in more revenue, that the folks who send advertising mail, catalogs and that stuff, should have their rates increased greatly. that's not going to be popular. >> what happens if nothing happens in congress? >> well, probably a slow bleed situation. the postal service right now has about $11 billion in cash in its bank account and it's going to keep having to draw on that cash as it runs kind of deficits. as the time goes by, that money is going to go down down down to the point where there's no cash left and one day the postal service can't turn on the lights. i would think congress feeling the heat before then would take action. >> how far away is that day? >> hard to say. right now the postal service is treading water with the amount of cash it's been able to hold,

but, you know, we get force quarterly financial report in the next month and it could show that cash position is eroding. >> to walnut, mississippi, jerry, good morning. >> caller: oh, yes, sir. i got a question for mr. kosar. about your package rates, i want to know why an individual, a private citizen, can go and ship a package to a third destination for a certain price, but they can go through eastboubay and t other companies and save a dollar, two dollars on the shipping. you can't tell me you're not making money on larger packages because y'all went up on it a

few years ago because of fuel, but now fuel has dropped, but your rates haven't dropped. >> mr. kosar. >> yeah. that's true. parcel prices are going in fact, the postal service asked just about a month or two back of its regulator the authority to increase parcel prices even further. and the regulator approved it. so parcel prices are going up 7% to 12%. why do parcel prices keep going up? one of the arguments is the postal service has not been pricing them high enough. we do compete with the private sector for the parcel market and the postal service has had prices that are significantly lower. and so i think the postal service view is that the future of its business is parte -- is through parcels because paper mail, the volume keeps going down. >> bluemont, virginia, andy, good morning.

>> caller: hi. the reason the postal service is under water is because they have to fund the pension program 75 years in advance. >> mr. kosar, is that correct? >> that is a claim that has been out there for a long time and the government accountability office years ago put out a report where they said that is not the case. and i think one of the things that is really important to remember is that the law says the postal service was supposed to pay into this retiree health benefits fund for a decade. and after that, they were supposed to take a mortgage on the remaining obligation. the postal service only paid into that for a few years but then quit paying. it does have cash on hand and could put money in the bhen -- the benefits fund but keeping the money in its pocket and stiffing the fund, it is running deficits. >> why did they quit paying and

who makes that decision? >> that is decided by the post master general. and the explanation seems to be the desire to preserve liquidity. let's keep enough cash on hand, let's not reduce our cash position. it shows that they are either anticipating large expenses to use the cash for or the possibility the business will continue to shrink which means they will need to draw from that cash to keep the lights on. >> and we're talking the future of usps. if you want to join the conversation, 202-728-2002. otherwise in the eastern or central time zones, 202-48-2002, and kevin kosar, you've come on to talk postal issues a couple of times with us. one time it was about the president's dispute with amazon that he wanted to change the deal usps had made with amazon.

remind us what that dispute was about and where we are right now on it. >> where does that dispute stem from. we know the president is not a big fan of jeff bezos and the washington poast and he had man criticisms and then the president brought up this issue of parcel pricing and made the accusation the postal service was losing money on every parcel they delivered. that opened up a real interesting can of worms because it is not just amazon, but many, many large companies make deals with the postal service to either send bulk mail or enormous numbers of parcels through the system. those deals are not something that are posted online. they are commercially sensitive information. and the public can't see them. and so that of course fueled a lot of suspicion about whether or not there was some sort of back door cronyism going on or some such. >> who signs off on those deals? do they have to make money. >> the postal regulatory

commission does have to sign off on the deals before they're implemented. >> what runs the postal regulatory commission. >> it is a bunch of appointees. they are presidentially apointed, senate confirmed. they are a nonpartisan agency. i don't think anybody ever accused them being in the democrats or republican's bag. they are technocratic and they look things over. >> who are the people that get appointed to that commission. >> it is a variety of folks. you have folks who used to work on capitol hill, you may have folks who worked in other agencies that have something to do with postal work. it varies. >> mary is up next in south carolina. although before we go to mary, so where are we right now on that amazon deal? >> right now, there is not -- i should say just one amazon deal. zahn h -- zahn has a variety of rates because it has a variety of mail in various places and each have to be renegotiated on a regular

basis and where those are, i'm not sure but the prc regulator has required prices to increase because that is what the postal service wanted to do so i would assume amazon and others will at some point have to pay more to ship parcels. >> so we don't know when the renegotiation would be when the -- amazon is up. >> one would have to look at the filings of the postal commission where these things get sorted out. >> now to mary in south carolina. thanks for waiting, mary. >> caller: okay, my idea, i've had this idea for a long time, is that instead of having mail six days a week, have mail delivered monday, thursday and friday and close the post office on all days except monday, wednesday and friday. because can get used to anything. most people don't get enough mail for six days worth of mail. they can wait and get it another day. and i think that would probably

save a lot of money because the trucks wouldn't be running, the post office wouldn't be open using utilities and for all of the new employees that you hire that you ought to give them 401(k) like other peoplin sped of having federal benefits for them because the federal government is breaking us. and also i think health care and retirement benefits, let them go on medicare like everybody else. give us all a break and we want a -- a poefs. but i think people can adjust to anything. thank you very much. >> thank you. kevin kosar, your thought's on mary's suggestions. >> it sounds like you've been doing your research on postal service reform. they suggest postal service deliver based on demand. instead of all homes and businesses six days per week, focus on those that need to get where they are going. so for example, prescription

drugs. postal service carries a lot of small packages of prescription drugs where you could see a good argument of those being delivered six days a week and advertising and catalogue mail, probably an argument for those not to be delivered six days per week. >> portland, maine, richard, good morning, postal worker. >> caller: yes, mr. cousar i would say you and mary are not focusing on postal reform. you are focusing on deformation of the u.s. postal service, the destruction of the u.s. postal service. in the first place, as you well know and you could explain better than i, the postal service is required to contribute these enormous amounts of money every year to the retirement and fund the pension system with -- in a matter of a few years that could be taken care of over the course

of decades. and that is -- that is one measure that the republicans have done to try to destroy the postal service. second, we could have public banking. we could have the kind of banking services that the u.s. post office department had at one time in the 60s so poor people and people who have a hard time maintaining the kind of bank accounts and commercial banks could use the post office and the same way that they use these check cashing services and all sorts of ways. and the idea of simply eliminating days and the three or four days worth of postal delivery every week, this is not postal reform and this is not what the american people want. the american people admire the

u.s. preels. mary is an outlier and i would say -- your ideas are nothing more than advancing the -- the agenda of right-wing republicans to undermine the postal service and to privatize, privatize. >> got your point. want to let kevin kosar respond. how long have you been a postal worker before you go? >> you've had a lot of time to reflect on your testimony. so you are now recognized to deliver that testimony. >> thank you, mr. chairman. and thanks to all of the members of the committee. the discussion draft of the bipartisan housing finance reform act develops thoughtful approaches to central issues in the reform of american housing finance. i remind us that this housing finance system