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    Updated July 15, 2011    
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A rebuttal: Postal Service runs net profit

July 7, 2011 -- An op-ed piece by NALC President Fredric V. Rolando, published July 7 in the San Diego Union-Tribune, rebuts a column last week by Bill Gunderson titled “Not rain nor sleet, but $25 billion can stop the mail."

A rebuttal: Postal Service runs net profit

By Fredric Rolando, July 7, 2011

Few institutions touch more Americans than the U.S. Postal Service, which delivers 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, stopping crime and more. We conduct the nation’s largest single-day food drive every year, replenishing food pantries in San Diego and everywhere else.

And yet, the misinformation circulating about the Postal Service is startling. We see this every day, but rarely to the extent contained in Bill Gunderson’s column (“Not rain nor sleet, but $25 billion can stop the mail,” Opinion, June 30), which claimed that the USPS has received a $25 billion subsidy, asserted that other firms can do more cheaply what the post office does, and even managed to blame it for newspapers’ struggles. (Luckily, the Padres aren’t on a losing streak.)

Rebutting his myriad flights of fancy would fill pages. Allow me to simply provide some facts – all easily verifiable – about the USPS, so readers will have context the next time somebody cites multibillion losses or potential taxpayer 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 selling its products and services 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. Despite the worst recession in 80 years, despite 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 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 pre-fund 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 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 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 Rep. Darrell Issa, R-Vista, introduced last month. Instead, his Postal Service reform bill would radically downsize the USPS and reduce services to the American people. We’re hoping he’ll work with Rep. Stephen Lynch, whose House bill addresses the pre-funding issue, the biggest single impediment to financial well-being for the USPS.

Once this immediate 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 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 the public to name us the most-trusted federal workers six years in a row.

And columnists aiming to shock, mislead, and denigrate everything government does will have to look elsewhere to promote their ideological goals.

Rolando is president of the National Association of Letter Carriers.


© National Association of Letter Carriers, AFL-CIO