Members of United States Postal Service (USPS) unions across the country took to the streets on April 12 to spread the truth about the “fiscal crisis” at the Postal Service.
Over the past two years we have experienced a steady stream of misinformation about the USPS, all aimed at drastically cutting services to the public and privatizing profitable aspects of mail and package delivery.
The biggest of the Big Lies is the claim that the USPS is broke and is losing billions ofdollars a year delivering mail. And, if this lie were true, it would mean that taxpayers would have to bail out the Post Office.
The USPS unions want politicians and the public to know that, over the past four years, the USPS has earned $611 million net profit delivering mail, despite the recession.
And, in fact, the USPS hasn’t taken a dime of taxpayers’ money in 30 years. All of its revenues come from the sale of its products and services.
But, there is a financial crisis at USPS: a $21 billion loss since 2007. How could they be making big profits but still losing money?
It all stems from a 2006 congressional mandate that required the USPS to pre-fund future retirees’ health benefits for the next 75 years… and to do so within a decade!
This is an unprecedented requirement that would drive any institution into red ink. Health care costs are high and expected to go up even higher. Pre-paying these huge costs, and for the next 75 years, is not reasonable and not required of any other agency or, for that matter, private enterprise. And to require the USPS to do this in only 10 years is completely irresponsible. Yet this congressional mandate is responsible for 100 percent of the USPS’s deficit. Why would Congress do such a seemingly-stupid thing? Didn’t someone tell them what would happen?
In all likelihood, leaders of Congress knew exactly what they were doing, and the impact it would have on the USPS. One only has to look at some of the proposed solutions to this manufactured crisis to see what’s at stake.
USPS’s Untold Story
Those who plan to trash the USPS think a lot of people would say “so what?” They count on the fact that most people take the Postal Service for granted without thinking too much about how it affects their lives.
In addition to delivering some 168 billion pieces of mail last year, the USPS also delivered 148 million “Priority Mail” packages. And, they pick up packages at your home.
And the USPS is very often the “last mile” carrier for FedEx and UPS. These huge, for-profit operations prefer to hand off their packages to letter carriers, who can deliver packages to people’s doors cheaply and efficiently.
An increasing portion of USPS’s business is in delivering medication to customers. Many people find it difficult to get to pharmacies, either because they have difficulty traveling or they live in an area some distance from stores. The Post Office’s “same day delivery” policy is often, literally, a life saver.
This quick delivery time is only made possible by maintaining smaller, scattered distribution centers and adequate staffing.
The USPS also provides valuable services to business by cheaply and efficiently distributing advertising, direct mailing, billing, payments and periodicals. Business services alone accounted for some $66 billion in revenue for USPS last year.
By maintaining a presence in the more profitable fields, such as those between big cities, the USPS is able to subsidize deliveries to less profitable areas, which are off the beaten path. In other words, if USPS lost most package delivery between New York City, Chicago and Los Angeles, and the Postal Service was left with what’s left, the cost of sending a holiday card to your aunt in Elkader, Iowa would skyrocket.
Then, of course, there’s the 5.6 million passport applications, 116 million money orders and packaging materials they provided last year.
And, did we mention, the USPS does all this without taking a dime of taxpayers’ money?
Most of the “talk” these days about how to resolve the phony crisis at USPS involves cutting services and, of course, getting rid of unionized employees.
Plans are underway to close thousands of post offices, eliminate Saturday delivery, close several mail processing facilities, cut other services and lay off some 120,000 employees.
If the USPS was severely cut back, mail and packages would still get delivered, but by one or another private, for-profit business like FedEx or UPS. And these private companies would “cherry pick” the services they chose to take over.
For example, package and mail delivery between big cities, like New York, Chicago and Los Angeles, are very profitable. The volume is high, there are few pick-up and delivery points and there are frequent direct flights. For-profit operations would compete to take over these routes if USPS was out of the picture.
But, no one would compete to deliver mail and packages to smaller communities or to homes, or to make one-day delivery of medications. That would be left to USPS or, more likely, wouldn’t get done at all.
There’s no doubt that, because of the unreasonable congressional mandate to pre-pay 75 years of retirees’ health care in 10 years, the USPS is running a big deficit. But the unions representing postal workers have a simple solution.
Part of the untold story of the USPS is the fact that employees have overpaid billions of dollars into federal pension accounts. That money is sitting there, unused, and it belongs to postal workers.
So, the unions are supporting H.R. 1351, introduced by Representative Steven Lynch of MA, that would allow the USPS to use the billions in overpayments to meet the short-term financial obligations.