Misinformation obscures Postal Service's profitable work
By Fredric Rolando | OpEd Contributor | 07/07/11 8:05 PM
Rep. Darrell Issa had a few things right in his recent piece on the U.S. Postal Service —Congress should act now, it bears "a considerable share of the blame" for the Postal Service's challenges, and the USPS is too important to fail.
Beyond that, let's just say that the amount of misinformation circulating about the USPS is striking, given that few institutions touch more Americans than it does in delivering mail to 150 million homes and businesses six days a week.
Letter carriers get to know our communities and customers, occasionally saving elderly residents who are ill, finding lost children, putting out fires and more. We also conduct the nation's largest single-day food drive, replenishing food pantries everywhere.
I'd like to provide some facts for your readers to consider the next time they hear about multibillion-dollar 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. And those services are delivered to residents and businesses at the best rates in the industrialized world. Customer satisfaction and on-time delivery are at record highs.
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. Rather, it stems from the 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—though not Issa—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, and it'll keep doing so. Letter carriers will continue to devise proposals for a USPS that serves ever better the needs of residents and businesses, even as we carry out our jobs with the dedication that has led the public to name us the nation's most-trusted federal workers six years in a row.
Fredric Rolando is president of the National Association of Letter Carriers.