United States Postal Service posts big loss — or small profit
A $1 billion profit, or a $4.2 billion loss?
The United States Postal Service said Aug. 11 it lost the larger sum in the three fiscal quarters that ended June 30, but a postal labor union countered that the government’s mail operation actually shows a $1 billion operating profit.
The disparity between the numbers cited by Postmaster General Patrick Donahoe and Fredric Rolando, president of the National Association of Letter Carriers, is more than an accounting dispute.
It might underline why Congress is seemingly unwilling to address the Postal Service’s continuing financial crisis.
Democrats and postal union leaders are saying that there is good news for the future of the USPS in the latest financial reports.
Republicans and USPS executives tend to say the Postal Service remains in serious financial difficulty. In their view, the Postal Service must face more deep cuts to save it from even greater massive deficits.
Both sides in the accounting debate did seem to agree on some of the details.
Both say that postal revenues are improving, especially in the area of package mail.
Advertising mail revenue is up, but first class mail, long the Postal Service’s cash cow, continues to decline.
“We’ve been effective in developing and marketing our products, and we’re improving how we leverage data and technology — all providing a higher return on mail for many customers and causing them to take a fresh look at the Postal Service,” said Donahoe.
Rolando, who had been in the fore of the unions’ attack on the USPS accounting, said, “The red ink at USPS is attributable to non-mail factors.”
By that, he blames the 2006 law that directed the Postal Service to pre-fund the future health benefits it will have to provide its retirees.
“That $5.6 billion annual charge accounts for most of the ‘losses,’” says Rolando.
“Given the positive mail trends, it would be irresponsible to degrade services to Americans and their businesses, which would drive away mail — and revenue — and stop the postal turnaround in its tracks,” the union president argues.
“Lawmakers need to preserve and strengthen the profitable postal networks — which are the future of the USPS as it increasingly delivers not just six but seven days a week while fixing the pre-funding fiasco,” Rolando said.
Thanks to the latest rate increase, postal revenues have climbed in the first nine months of the fiscal year, rising to $51.2 billion from $50.2 in the previous year.
The USPS put its loss in the third quarter alone at nearly $2 billion, wider than the $740 million loss of 2013.
Many lawmakers want to slow down Donahoe’s cost cutting.
Half of the Senate, most of them Democrats, have signed a letter to their chamber’s appropriations committee saying they want the panel to place a one-year moratorium on Donahoe’s plans to shutter 82 more mail processing plants.
What troubles them is the loss of 15,000 well-paying postal jobs in their states as well as plans to slow down the mail deliveries, the letter said.
In announcing the latest financial figures, Joseph Corbett, the agency’s chief financial officer, noted that it needs to invest “up to $10 billion to replace our aging vehicle fleet, purchase additional package sorting equipment and make necessary upgrades to our infrastructure.”
But with all the Congressional angst over the Postal Service’s plans, it seems most likely that the lawmakers will do what they like to do when facing a big problem: delay taking action.
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