A recent commentary piece on the Congress blog argued that the U.S. Postal Service shouldn’t expand the services it offers to businesses and to the public, because it “is swimming in red ink again.” 

If the Postal Service focused on doing a better job on its core mission, it wouldn’t be losing so much money and wouldn’t need to try to make up for the losses by venturing into “side businesses” such as delivering packages for Amazon, the argument went. 

ADVERTISEMENT

As the piece unintentionally demonstrates, misinformation abounds about the Postal Service. That’s the case even though the Postal Service is based in the Constitution, delivers daily to 153 million homes and businesses while providing Americans the industrial world’s most-affordable delivery network, is the largest civilian employer of veterans and is annually rated the most trusted federal agency by the public.

Let’s look at the facts.

Postal Service operations are profitable, and increasingly so. Through the first three quarters of Fiscal Year 2015, earned revenue exceeds business expenses by $1.2 billion. (The Postal Service funds itself through the sale of stamps and other products, not through taxpayer dollars.)

That’s ahead of the figures at this point last year. The Postal Service ended fiscal 2014 with a $1.4 billion operating profit, which in turn was better than 2013.

Why the improving picture? After falling sharply during the worst recession in 80 years, mail revenue is stabilizing amid a gradually improving economy. Meanwhile, as folks in Virginia and Washington D.C. and elsewhere shop online, package revenue is skyrocketing, making the Internet a net positive and auguring well for the future.

I would be remiss if I did not note the statements of the past postmaster general and his successor that record worker productivity by letter carriers, postal clerks and mail handlers also has contributed to the growing operating profitability, with fewer employees providing mail services to a growing number of addresses.

There is red ink at the Postal Service, but it has nothing to do with the mail or the Internet. Rather, it stems from Washington politics. In 2006, a lame-duck Congress mandated that the Postal Service prefund future retiree health benefits. No other government agency or private company in the country has to prefund for even one year; the Postal Service must prefund 75 years into the future and pay for it all over a decade. That $5.6 billion annual charge is the red ink.

The notion that a focus on expanding services has distracted the Postal Service from carrying out its top priority – speedy delivery of the mail – and has caused red ink has it almost entirely backwards.

Rather, the political interference by Congress in the form of the onerous and unfair prefunding mandate, signed into law by President George W. Bush, created an artificial ‘crisis’ at the Postal Service.

That, in turn, led the recently departed postmaster general to make the short-sighted decision to try to “shrink to survive” – reducing hours or even closing post offices and mail-processing plants, which in turn slowed the mail.

The new postmaster general, however, realizes that it’s illogical to respond to the pre-funding problem by degrading increasingly profitable postal services when that hurts not only the public but the Postal Service itself by reducing revenue. Some critics, however, including some lawmakers, still seek to end six-day delivery or door-to-door delivery, which would send the Postal Service into a downward spiral.

Pre-funding is a political problem that lawmakers created – and that they can and should address. If and when it takes up postal legislation, Congress also should preserve and strengthen the now-profitable postal networks. Not only is the Postal Service critical to our economy and our recovery by facilitating commerce and offering businesses and residents universal and affordable service, it also is the centerpiece of a $1.3 trillion national mailing industry that employs 7.5 million Americans in the private sector.

As for new ventures for the Postal Service, now that we’ve explained the source of the red ink and the cause of the slowing of the mail, the path ahead is a matter of common sense. Proposals that would meet the needs of an evolving society, boost job-creating businesses and generate earnings for the Postal Service – i.e. be a win for all involved – should be seriously considered.

 

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