Another View: U.S. Postal Service's financial woes are a problem of politics, not parcelsBY FREDRIC ROLANDO
December 03. 2012 6:05PM
Few agencies interact more regularly with individual citizens than the United States Postal Service (USPS), which delivers to more than 150 million addresses six days a week across the country, from the most isolated villages to the most densely populated cities.
For six years in a row, Americans have named the Postal Service, which is older than the country itself, the most trusted federal agency.
Despite this, the conventional wisdom - that an agency losing billions of dollars a quarter because everyone's on the Internet necessitates sharp cuts in service lest taxpayers be on the hook - is highly misleading.
Granite Staters deserve to know the story behind the headlines. So too, do the Granite State's political representatives, with the fate of this venerable American institution likely up to the next Congress. Few states would be more affected by cuts in service than New Hampshire, with its many small towns and rural areas, its large number of small businesses and its high proportion of elderly residents.
The Postal Service is a topic that should unite Republicans and Democrats, conservatives, moderates and liberals - and, of course, the independents that abound in New Hampshire. There's never been, and shouldn't be, anything partisan about the post office. Here are some easily verifiable facts about the actual financial situation.
The Postal Service is financially self-sufficient. It pays for itself by the revenue it earns selling stamps and other products. Taxpayers don't fund it, and haven't for 30 years.
Moreover, the Postal Service's financial performance has been admirable. Through the mid-2000s, the USPS had annual profits in the low billions. Since 2007, in the worst economy since the Depression, it's had an average annual loss from postal operations of about $1.2 billion, unsurprising given the mass unemployment, extensive business failures and high foreclosure rates. Today, on-time deliveries and worker productivity are at record highs.
The oft-cited multibillion sea of red ink has little to do with the mail; much to do with politics. In 2006, Congress mandated that the Postal Service do something no other agency or company in the country has to do - pre-fund future retiree health benefits. Moreover, lawmakers set a highly aggressive level: pre-funding for the next 75 years, paid within a decade.
This mandate accounts for 80 percent of all USPS red ink, $11.1 billion alone in just-completed fiscal 2012. Without it, the Postal Service could readily have weathered the tough economy. This artificial crisis has exhausted the agency's savings, borrowing authority and periodic profits. Beyond that, it's distracted the Postal Service from doing what it's always done: develop a business plan to meet the challenges of an evolving society while seizing the opportunities.
Rather than rushing through a flawed bill in a lame-duck session, the new Congress should start over in January and fix pre-funding. That would eliminate the biggest drain on postal finances. It also would relieve the crisis atmosphere, letting the postal community focus on developing a forward-looking plan.
Opportunities abound. The very Internet that provides challenges also provides opportunities. More folks pay bills online but they're also ordering goods online - packages that require delivery. This exploding e-commerce market already is boosting Postal Service revenue - in fiscal 2012 alone by 8.7 percent - as FedEx and UPS turn to its highly efficient universal network to deliver their packages cost-effectively.
The USPS provides the world's most affordable delivery service. It's rooted in the Constitution. It unites this vast land. It anchors a $1.3 trillion mailing industry employing 7.5 million private-sector Americans, including 42,160 in New Hampshire.
It's critical to small businesses, which are open weekends and need to send and receive financial documents. Ending Saturday service would impose added costs on New Hampshire's small businesses, with 289,779 employees. It also would disproportionately affect the elderly, rural communities and people who need medicines on weekends.
Under a program President George W. Bush began and President Obama continues, letter carriers, of whom one-quarter are military veterans, have voluntarily trained to deliver medicines to residents in several metropolitan areas (including Boston) in event of a biological attack. The "Carrier Alert" program protects the elderly and disabled living alone. Letter carriers annually conduct the country's largest single-day food drive, replenishing food banks nationwide. All for free, and without a dime of taxpayer money.
For 200 years, the Postal Service has faced technological innovations such as the telephone, fax machine or telegraph, emerging stronger each time. If lawmakers address the pre-funding fiasco - rather than reducing services to Americans and their businesses - it can do so once again.
Fredric Rolando is president of the National Association of Letter Carriers.