Reducing postal service is not the answer
Post office financial woes have nothing to do with mail delivery and everything to do with a misguided retiree health policy
By Fredric Rolando
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 annually conduct the nation's largest single-day food drive, replenishing food pantries in Baltimore 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. Such myths spur proposals to reduce services to the public, including the recently revealed plan to close 3,700 post offices nationwide. That list includes 41 post offices in Maryland, mostly in rural areas but also eight in Baltimore.
Let me provide some facts about the USPS, so readers will have context when they hear such things.
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.
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 and 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.
That's the elephant in the room — not Saturday mail delivery, not post offices that serve urban or rural areas. Remove this onerous pre-funding 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 and key Republican and Democratic legislators 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. This responsible business move, with zero taxpayer involvement, would leave pensions and retiree health benefits fully funded well into the future while putting the USPS budget back on sound financial footing.
Several bills filed by Senate and House legislators of both parties call for this. It addresses the actual financial drain, as opposed to the self-defeating attempts to decimate services as the agency tries to find $5.5 billion every Sept. 30 for the pre-funding payments.
Among the bad ideas this frenzy has produced is ending Saturday delivery — eliminating 17 percent of service to save 2 percent in costs. Moreover, it would inconvenience millions of residents who rely on Saturday delivery of medicines and small businesses that are open Saturday, while reducing USPS market share.
If Congress remedies the crushing burden it imposed, then the postal community can focus in a thoughtful manner on adapting, as it always has, to society's evolving needs. Faced with the telegraph, the telephone and other innovations, the Postal Service inevitably found new and better ways to serve residents and businesses.
Today, the Internet offers both challenges and opportunities. While more people now pay bills online, more people also order online — and those goods must be delivered. Already, last-mile Postal Service delivery of packages for FedEx and UPS is a profit-maker.
Moreover, the Postal Service is the central element in a $1.3 trillion U.S. mailing industry that supports 7 million to 8 million private-sector jobs. And its universal delivery network is invaluable in untold ways. When the Department of Homeland Security sought ways to distribute medicines to residents in the event of a biological attack, it turned to the Postal Service. The result: A Cities Readiness Initiative already in place in Minneapolis, with letter carriers volunteering, and a second pilot program underway inLouisville, Ky.
While waiting for Congress to address pre-funding, letter carriers will continue serving local communities with the dedication that has led residents of Baltimore 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. His email is firstname.lastname@example.org.