The U.S. Postal
Service is adapting
By Fredric Rolando
Posted: 08/20/2011 01:00:00 AM MDT
Few institutions touch more Americans than the U.S. Postal Service, whose role is spelled out in the Constitution and which delivers to 150 million homes and businesses six days a week. Letter carriers get to know our communities, occasionally saving elderly residents who are ill, finding lost children and stopping crime. We conduct the nation's largest single-day food drive every year, replenishing food pantries in Denver and elsewhere.
And yet, the misinformation circulating about the Postal Service is startling, such as the notion that in delivering the mail, the USPS has a massive imbalance between revenues and expenses for which taxpayers are footing the bill.
Let me provide some facts -- all easily verifiable -- about the USPS, so readers will have context the next time somebody cites multibillion losses or proposes ending Saturday mail delivery.
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 selling its products and services -- at the best rates in the industrialized world. Customer satisfaction and on-time delivery are at record highs, and labor costs are declining because of mutual cooperation.
Furthermore, USPS financial problems have surprisingly little to do with delivering the mail. In the past four fiscal years, despite the worst recession in 80 years, despite Internet diversion, revenues from postal operations exceeded costs by $611 million.
The problem lies elsewhere: The 2006 congressional mandate that the USPS pre-fund future retiree health benefits for the next 75 years, and do so within a decade -- an obligation no other public agency or private firm faces. The roughly $5.5 billion annual payments since 2007 -- $21 billion total -- are the difference between a positive and negative ledger.
Remove that unreasonable obligation and the Postal Service would have been profitable even during this economic downturn, and periods with losses would be manageable.
But we're not even asking that it be removed. What USPS management, unions, the Postal Regulatory Commission and key Republican and Democratic legislators on postal issues ask of Congress is simply this: Let the Postal Service stop depleting its operating funds to make these payments, and instead allow an internal transfer of funds from its pension surpluses -- a responsible business move.
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 by Senate and House legislators of both parties would accomplish that, though not the one from Rep. Darrell Issa (R-CA), which would drastically reduce services to the public. Addressing the pre-funding problem has no downside, while ending Saturday delivery would eliminate 17 percent of service to save 2 percent in costs -- a formula no sensible business would adopt. Moreover, it would inconvenience many residents of Colorado and other states who rely on delivery of medicines on Saturdays and small businesses that are open Saturday, while reducing future USPS revenue by decreasing market share.
Once the 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 on line but also order on line -- and those goods must be delivered. Already, last-mile Postal Service delivery of packages for FedEx and UPS, inexpensive given its universal network, is a profit-maker. Moreover, the Postal Service is the central element in a $1.3 trillion U.S. mailing industry that supports seven-eight million private-sector jobs.
Since Benjamin Franklin's days 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's led residents of Denver and the entire country to name us the most-trusted federal workers six years in a row.
Fredric Rolando is president of the National Association of Letter Carriers.