Most everyone has heard about the long-standing financial problems plaguing the United States Postal Service. However, what most people may not be aware of is that the U.S. Congress helped create the annual reported losses in revenue with legislation that was passed back in 2006. Under the legislation, Congress mandated that the USPS had to pre-fund health care benefits for postal retirees 75 years into the future. This is ridiculous.
This legislation makes it mathematically impossible for the Post Office to become profitable with this burden. Oddly enough, the majority of other branches of the federal government, such as the United States Army — aren’t required to fund their health benefits this far in advance. Moreover, since this law was enacted, the Postal Service has been shrinking — and not growing — in an effort to cover losses. Commercial mail boxes have been removed across the country, and revenue from 2006 to the present has fallen a staggering 21 percent.
Last May, Fredric Rolando of the National Association of Letter Carriers, stated that the USPS is financially speaking back on track. Rolando spoke of an “emerging consensus among key lawmakers, the Postal Service, postal unions, businesses, mailers and industry groups to move forward with practical reform that all stakeholders can buy into.”
In fact, on May 11, House Oversight Chairman Jason Chaffetz, (R-Utah), convened a committee to solve the crisis precipitated by the 2006 law.
“We cannot ignore this,” he said, calling a healthy postal system vital to the U.S. economy. The committee’s efforts enjoy bi-partisan support.
“We are going to get postal reform,” agreed Rep. Gerald Connelly, (D-Va.), one of several committee members who have been working on the legislation for several weeks.
Postmaster General Megan J. Brennan stated that she was requiring postal retirees to use Medicare as their primary insurance. She cited that this alone would save the USPS $17.5 billion over the next four years. Brennan has also asked Congress to order a return of the 49-cent first-class postage stamp and other temporary rate increases that ended on April 10, 2016.
Lastly, Brennan requested that the Postal Service’s retirement liability should be calculated on “postal-specific assumptions” rather than government-wide retiree assumptions and “limited additional product flexibility.” These measures would lead to a s savings of $32 billion over the next four years.
Even with the curtailment of services and a reduction of one-quarter of 150,000 employees nationwide, the United States Postal Service reported that its “controllable” operating income actually grew in the second quarter to $576 million as of March 31 of the current fiscal year.
This figure is ahead of a previously forecasted income of $313 million for the same period in fiscal 2015.
Nevertheless, the 2006 legislation will force a $2 billion loss for the quarter ended March 31, 2016 compared with a loss of $1.5 billion in the same period of 2015. With figures like these, it would seem logical to nix the 2006 legislation that appears to be destroying all profits at the USPS. This would enable a revenue of $17.7 billion to be posted in the quarter, compared to $16.9 billion in the same period of 2015 — in the black.
Perhaps it’s this kind of logic that has me purchasing first class stamps and choosing to stand in line at the grocery where a clerk rings up my goods, instead of using the self-service kiosks that scan my grocery purchases. By doing so, I am saving someone’s job.
There will never be a service that compares to that performed by a human being. And private delivery companies such as Federal Express and United Parcel Service can still operate profitably within their own niche’. Sans the 2006 legislation, the United States Postal Service may even begin to grow itself to profitability, instead of using cut-backs to achieve profits. Removing the 2006 legislation or amending it as a solution is merely common sense.