I’d like to provide some facts forthe next time you hear about multibillion-dollar Postal losses or potential bailouts. For starters, the Postal Service doesn’t use a dime of taxpayer money and hasn’t for more than a quarter-century. Its revenue comes from the sale of its products and services — delivered to residents and businesses at the best rates in the industrialized world.
Further, the USPS runs a net operational profit delivering the mail. Even with the worst recession in 80 years, even with Internet diversion, the USPS takes in more money from postal operations than it spends.
Over the past four years, revenues exceeded costs by $837 million; last quarter’s net operating profit alone was $226 million. The $20 billion in losses cited over the past four years has surprisingly little to do with declining mail volume or the Internet.
The problem is a 2006 congressional mandate that the USPS prefund future retiree health benefits for the next 75 years, and do so within a decade — something no other public agency or private firm does. These roughly $5.5 billion annual payments since 2007 — $21 billion in total — are the difference between a positive and negative ledger.
Remove that unreasonable obligation and the Postal Service would have been profitable. But we’re not even asking that it be removed. What USPS management, unions, the Postal Regulatory Commission, key Republican and Democratic legislators on postal issues and others are asking of Congress is simply this: Allow the Postal Service to stop depleting its operating funds to make these payments, and instead permit an internal transfer of funds from its pension surpluses — as any responsible business would do.
This is earned USPS revenue, with zero taxpayer involvement. The transfer would leave pensions and retiree health benefits fully funded well into the future, while putting the USPS operational budget back on sound financial footing on paper — as it’s been all along in practice.
Several bills filed in the Senate and the House by legislators from both parties would accomplish just that. Once this immediate financial hurdle is overcome, the postal community can focus on continuing to adapt to society’s evolving needs.
The Internet offers both challenges and opportunities. For example, more people now pay bills online but also order online — and those goods must be delivered. Already, last-mile USPS delivery of packages for FedEx and UPS, inexpensive given its universal network, is a fast-growing profit-maker.
Since the days when Benjamin Franklin served as the first postmaster general, the Postal Service has been adapting to the nation’s needs, and it’ll keep doing so.
Fredric Rolando is president of the National Association of Letter Carriers.