U.S. Postal Service delivering profitable service - Watchdog.org

U.S. Postal Service delivering profitable service

By   /   March 31, 2014  /   No Comments

By Fredric Rolando

With the U.S. Postal Service often in the news today, I’d like to provide some information folks might find useful – about the value of the Postal Service and about its actual financial situation.

The Postal Service, which is older than the country itself, based in the Constitution, and was first led by Postmaster General Ben Franklin, traditionally hasn’t been a partisan issue.

WE STILL DELIVER: Fredric Rolando says the U.S. Postal Service is profitable, if you take away the requirement that it pre-fund future retiree health benefits.

WE STILL DELIVER: Fredric Rolando says the U.S. Postal Service is profitable, if you take away the requirement that it pre-fund future retiree health benefits.

The Postal Service does today what it’s done for 239 years – link communities throughout this vast nation. It provides Americans with the world’s most affordable delivery network, helping businesses small and large.

It supports the $1.3 trillion national mailing industry, which provides 7.5 million private-sector jobs. And it’s the largest civilian employer of veterans; one quarter of letter carriers served in the military.

The value of the postal networks extends beyond the mail. After 9/11, when President George W. Bush sought a way to protect Americans in the event of a biological attack on a major metropolitan area, he turned to the USPS as the nation’s only universal delivery network. The result: the Cities’ Readiness Initiative, under which letter carriers volunteer to be trained and to stockpile medicine to deliver to all residents within 48 hours of an attack.

On a daily basis, letter carriers save the lives of elderly residents who’ve fallen ill, find missing children, put out fires, stop crimes and pull people out of auto wrecks. They do these things not because they’re superheroes but because they have the privilege of being in neighborhoods every day, are dedicated to the families they serve, know when something’s wrong, and often are first on the scene.

Letter carriers also conduct the nation’s largest single-day food drive the second Saturday each May, helping food pantries feed millions of Americans during the summer months when school meal programs aren’t available.

None of this would mean much if the prevailing myth about postal finances were true – that the Postal Service is losing billions of dollars a year delivering the mail because everyone’s on the Internet, taxpayers are on the hook for this, and so drastic cuts are needed.

Here are the facts: The Postal Service isn’t funded by taxpayers; it earns its revenue by selling stamps. And it’s operationally profitable. Last year it had a $623 million operating profit; the first quarter of fiscal year 2014 produced $1.1 billion in black ink.

Why the good performance? As the economy gradually improves, letter revenue has stabilized. Meanwhile, with people ordering more goods online, package revenue is skyrocketing. That makes the Internet a net positive.

The red ink one hears about stems entirely from congressional politics. In 2006, a lame-duck Congress mandated that the Postal Service pre-fund future retiree health benefits. No other public or private entity is required to do this for even one year; USPS has to pre-fund 75 years into the future, and pay for it over a decade. This $5.6 billion annual charge accounts for 100 percent of postal “losses.”

Some lawmakers propose eliminating Saturday delivery or door-to-door delivery. That would hurt millions of Americans and businesses while stopping the postal turnaround in its tracks by driving mail – and revenue – away. Instead, legislators should fix the pre-funding fiasco they created.

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