Much of the coverage about the U.S. Postal Service tells us that it is losing money hand over fist. But one of the questions journalists are supposed to ask–why?–is rarely posed.
A letter to the editor in today’s USA Today tries to fill in that gap:
Letter: Congressional mandate behind Postal Service woes
Your article “Anything Good in the Mail?” is misleading about the reasons for the U.S. Postal Service’s financial problems. It focuses on competition from the Internet, conventional wisdom that doesn’t withstand scrutiny (“Bell Tolls for the U.S. Mail, as We Know It“).
Almost 90 percent of the red ink stems directly from a 2006 congressional mandate that the Postal Service pre-fund future retiree health benefits for the next 75 years and do so within a decade. This burden, borne by no other public agency or private firm, costs the Postal Service $5.5 billion annually. Also contributing is the worst economy in 80 years; mail volume always dips during a recession. The Internet, meanwhile, is a mixed bag; it presents challenges with people paying bills online, but also offers opportunities to deliver goods ordered online.
These points are reflected in the Postal Service’s financial performance for the first quarter of fiscal year 2012. CFO Joseph Corbett announced February 9 a $200 million net operational profit delivering the mail, a strong performance he attributed largely to a 7 percent rise in shipping goods ordered online.
Overall, however, he reported $3.3 billion in red ink, with $3.1 billion of that from the pre-funding fiasco. This artificial crisis, unrelated to the mail, is the elephant in the room that needs to be addressed.
Fredric Rolando, president
National Association of Letter Carriers