Reader's View: Setting the facts straight about the Postal Service’s finances

September 27, 2013 

A Sept. 18 column in the Idaho Statesman accurately depicted the U.S. Postal Service’s importance to Idaho as a unifying element that links your cities, small towns and rural areas while also providing gathering places.

But the piece contained some questionable conventional wisdom about the Postal Service’s financial situation, its future viability and the impact of the Internet.

With USPS so critical for Idaho — given the Gem State’s vast size, many remote areas and numerous small businesses — I’d like to offer some information readers may find useful going forward.

First, there is not a financial crisis at the Postal Service in any normal business sense. So far this year, USPS is profitable by $330 million delivering the mail.

Second, the Postal Service is not being done in by electronic communication. On the contrary, the Internet offers opportunities that are helping USPS’ bottom line.

Let’s look at fiscal year 2013. The first quarter produced an operating profit of $100 million — with $17.7 billion in revenue from selling stamps and $17.6 billion spent to deliver the mail. (The Postal Service gets no taxpayer funding; it earns its money selling stamps.) The recent third quarter’s operating profit was $660 million.

This outstanding performance results from several factors.

As the economy gradually improves, so do postal finances, because mail volume always dips during a recession. Worker productivity is at a record high. And, the Internet is becoming a positive factor for USPS.

While the Internet leads more people to pay bills online, it also spurs them to order goods online. Revenue from those package deliveries is increasing faster than first-class mail revenue is declining.

And so, USPS revenue rose by 3.6 percent in the recent third quarter compared to one year ago — double the national economy’s improvement.

But what about the red ink you’ve heard about? It’s there, but it doesn’t stem from delivering mail to homes and businesses in Boise or elsewhere. Rather, it’s caused by congressional interference, as your column suggests.

In 2006, Congress mandated that the Postal Service prefund future retiree health benefits. No other public or private entity is required to prefund for even one year; USPS has to fund for the next 75 years — and pay it all within a decade. Annual cost: $5.5 billion.

That unfair burden accounts for 100 percent of this year’s red ink — and then some.

What makes the situation particularly absurd is that the Postal Service already has put aside $50 billion to pay future retiree health benefits, enough to do so for decades — a statement few, if any, companies can make.

It’s obvious that lawmakers should address the prefunding mess they created, so the Postal Service can focus on continuing to provide folks in Grand View and Pocatello and all over the country with the world’s most affordable delivery service.

Instead, some legislators — motivated by zealotry or lack of facts — would compound their error. They aim to take away door-to-door delivery and compel Boise residents to traipse around the neighborhood in all kinds of weather looking for “cluster boxes.” They want to eliminate Saturday mail delivery, raising costs for Idaho’s small businesses (with 281,500 employees), which would have to hire private carriers on weekends to receive checks.

And degrading the network would do additional harm. A robust, six-day-a-week Postal Service is the centerpiece of a $1.3 trillion mailing industry employing 7.5 million Americans in the private sector — including 62,923 in Idaho.

Idaho’s representatives in Washington can reduce service and send the USPS on a death spiral by driving mail (and revenue) away. Or, they can fix the prefunding fiasco. Your readers can help them choose wisely.

Fredric Rolando is president of the National Association of Letter Carriers, Washington, D.C.

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