Fredric Rolando is president of the National Association of Letter Carriers.
The Lexington Institute’s Don Soifer has done some in-depth pieces on the U.S. Postal Service, including a recent one on the financial picture at USPS.
I appreciate the opportunity to provide some additional perspective and information about this American treasure, which is based in the Constitution, is consistently rated the public’s most-trusted federal agency and delivers 47 percent of the world’s mail.
Six and increasingly seven days a week, letter carriers deliver to 155 million U. S. homes and businesses from coast to coast. Daily, an average of 3,630 new household, business or organization addresses are added to the postal delivery network.
All this occurs without a dime of taxpayer money. By law, USPS is self-funded, earning its revenue by selling stamps and services.
Perhaps of particular interest to Lexington’s readers: The Postal Service is the largest civilian employer of military veterans in the country – nearly one of every four letter carriers is wearing his or her second uniform – and it also plays a role in neighborhood and national security. I’ll expand on that role below.
Much of the recent attention to the Postal Service has focused on its finances, and some misconceptions still circulate, such as that of an agency losing billions of dollars a year because of the Internet, making it the victim of ineluctable technological progress.
The facts paint a quite different picture. The Postal Service has been operating in the black since 2013, to the tune of $4.2 billion in operating profit. Its earned revenue exceeded normal business expenses by more than a billion dollars apiece in both fiscal year 2014 and 2015, and through the first three quarters of FY 2016, the operating profit stands at $1.3 billion.
Equally important, that impressive performance stems largely from two structural factors. As the economy continues to improve from the worst recession in 80 years, first class mail revenue is largely stabilizing. Meanwhile, as the Internet drives online shopping, package revenue is skyrocketing, which augurs well for the future. Record worker productivity has played a role as well.
There is red ink, but it has nothing to do with the mail and everything to do with flawed public policy. In 2006, a lame-duck Congress mandated that the Postal Service pre-fund future retiree health benefits decades in advance. No other entity in the country, public or private, has to pre-fund these benefits for even one year. That mandate, costing $5.8 billion annually, not only accounts for the red ink; it disguises the actual profits postal operations have been generating for years. (It’s important to note that this charge goes on the books each year as a loss, whether or not USPS can afford to pay it, thereby producing the ‘red ink.’)
Addressing this elephant in the room—pre-funding—is imperative because of the Postal Service’s role in so many facets of American life, including in small towns and rural areas, where the post office often is the center of civic life.
More broadly, the Postal Service is the centerpiece of the $1.3 trillion national mailing industry, which employs 7.5 million Americans in the private sector.
USPS and letter carriers enhance the quality of life of communities throughout the country. In May, letter carriers conducted their 24th annual food drive—the largest single-day food drive in the country—collecting a record 80 million pounds of food from generous Americans to help replenish food banks, pantries and shelters from coast to coast.
Every day as they deliver mail on their routes, letter carriers around the country help save the elderly or other residents who have fallen or experienced medical problems, locate missing children, rescue people after automobile accidents or help stop crimes in progress.
The Postal Service and letter carriers also play a role in national security. After the terrorist attacks of 9/11, when President George W. Bush sought a way to protect Americans in the event of a bio-terror attack, he turned to the nation’s only universal delivery network, the U.S. Postal Service. Letter carriers have volunteered to be trained to stockpile and deliver medicines to every household in several major metropolitan areas within 48 hours of an attack, to save lives and avert panic. Just imagine what it would cost to set up such a program from scratch.
These are just some of the reasons why the Postal Service enjoys enthusiastic support from the public and from lawmakers across the political spectrum, including many conservatives.
If Congress acts on practical, targeted postal reform that addresses pre-funding, allows USPS to use its invaluable networks for some new products and services, and adopts best private-sector practices in investing the USPS retiree health benefits fund, the Postal Service can continue to provide all Americans with the industrial world’s most affordable delivery services.
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