Postal service red ink not about the carriers

September 23, 2013 

  • At issue: Sept. 3 Kentucky Voices column by Jerry Ulickey, "Congressional action, not price hike, USPS answer"

The U.S. Postal Service, older than the country itself and rooted in the Constitution, today provides Americans and their businesses with the world's most affordable delivery service.

In neighborhoods throughout the Lexington area, letter carriers serve people six days a week and contribute far more than delivering the mail.

And yet, there's a good deal of misinformation about the Postal Service, reflected by proposals in Washington that would hurt folks and small businesses in Kentucky and elsewhere. So here are some facts:

The Postal Service doesn't use a dime of taxpayer money. It funds itself by the sale of stamps and other services. And it's doing far better financially than you've heard.

For example, in the first quarter of this fiscal year, it had a net operating profit of $100 million — taking in $17.7 billion in revenue from selling stamps and spending $17.6 billion delivering the mail.

That was no fluke. Year-to-date, the USPS is profitable in normal business terms — operating revenue minus operating expenses by more than $300 million.

But isn't the Internet driving down mail volume and hurting the Postal Service's bottom line? That's another aspect of the conventional wisdom that doesn't stand up to scrutiny.

Yes, first-class mail revenue is down about 2 percent this year, given e-mails and online bill-paying. But package-delivery revenue has risen 9 percent as more people order items online. Internet-related opportunities are offsetting the challenges it presents.

That, along with the gradually improving economy, explains why Postal Service operations are doing better now than last year and why last year was better than the year before.

So what about that red ink you've heard about?

There is red ink, but it doesn't result from delivering mail to homes and businesses in Kentucky. Rather, it stems from political interference by Congress.

In 2006, Congress mandated that the Postal Service pre-fund future retiree health benefits. No other public or private entity is required to pre-fund for even one year; the Postal Service has to pre-fund for the next 75 years — and pay it all within a decade.

That unfair burden accounts for 100 percent of this year's red ink and then some. The USPS reports $3.9 billion in red ink this year, but it's been charged $4.2 billion in pre-funding. What makes this mandate all the more absurd is that the Postal Service already has set aside some $50 billion — sufficient to meet health care payments for future retirees for decades. Few if any companies can say that.

Clearly, lawmakers should address the pre-funding mess they created, and allow the Postal Service to adapt to technological change, as it's done for two centuries, while continuing to provide the world's best delivery services.

Instead, some in Congress want to compound their error by depriving Kentuckians and their businesses of services.

They want to take away door-to-door delivery and force you to traipse around the neighborhood in all kinds of weather looking for cluster boxes. They want to eliminate Saturday mail delivery, compelling small businesses open weekends to hire expensive private carriers to conduct business. This would raise costs for Kentucky's small businesses, which employ 696,652 people.

Moreover, a robust, six-day-a-week Postal Service is the centerpiece of a $1.3 trillion national mailing industry employing 7.5 million Americans in the private sector— including 114,212 in Kentucky.

The negative consequences of degrading the unique postal network go beyond economics. Letter carriers conduct the nation's largest annual single-day food drive the second Saturday of each May, restocking local food pantries, shelters and church food programs in Lexington and elsewhere for the critical summer months without school food programs.

And, in a program begun by President George W. Bush after 9/11 and expanded by President Barack Obama, letter carriers (one-quarter are military veterans) volunteer and are trained to deliver medicines house-to-house in major metropolitan areas in event of a biological attack. Seven areas already are protected, including Louisville.

Kentucky's representatives in Washington have a choice. They can degrade service to Kentuckians and send the Postal Service on a downward spiral by driving mail and revenue away from the USPS. Or, they can fix the pre-funding fiasco. We hope your readers help them choose wisely.


At issue: Sept. 3 Kentucky Voices column by Jerry Ulickey, "Congressional action, not price hike, USPS answer"

Fredric Rolando is president of the National Association of Letter Carriers.

Lexington Herald-Leader is pleased to provide this opportunity to share information, experiences and observations about what's in the news. Some of the comments may be reprinted elsewhere in the site or in the newspaper. We encourage lively, open debate on the issues of the day, and ask that you refrain from profanity, hate speech, personal comments and remarks that are off point. Thank you for taking the time to offer your thoughts.

Commenting FAQs | Terms of Service