Postal Service can’t continue on same financial path
Well, no surprise that the U.S. Postal Service is at it again. No, we’re not talking about delivering the latest fliers, magazine subscriptions and credit card pitches to your door. It’s losing money. Lots and lots and lots of money.
How much money, you ask?
It showed a net loss of $1.3 billion between January and March. We can all agree that’s a lot. That’s well up from the same time frame in 2017, when it lost $562 million, which it blamed on rising fuel and labor costs.
For the nine years from 2007 to 2015, the Postal Service lost about $55 billion. One wonders how such an operation stays open. Most entities that suffered such losses would have to close their doors. But this is a government agency, after all. And we all know that no matter how much debt piles up, the government will just keep spending while casually announcing it’s just part of the rising cost of doing business. If you look at government budgets at any level, they generally keep increasing, even though you will notice little or no increase in service.
But we digress.
Now, before we go on, we want to point out the Postal Service, which is not funded by taxpayers, didn’t always lose money. It used to make money. But then folks began using the Internet to send letters and started relying more and more on UPS and FedEx for shipping packages. And before you could lick another stamp, the Postal Service was drowning in stacks of bills.
We also want to point out we appreciate the efforts of the Postal Service employees. They are hard-working and dedicated folks. Many have committed their lives to being sure the mail gets through, whether that be rain, snow, storms or sunshine. They are your neighbors, your family, your friends.
So what’s the problem now with the Postal Service?
Earlier this year, President Donald Trump established a task force to study why the Postal Service is losing money. That seems like a perfectly reasonable move.
“The USPS is on an unsustainable financial path and must be restructured to prevent a taxpayer-funded bailout,” the executive order reads.
Correct on both counts.
Yes, that’s you, the taxpayer, who will end up holding the mailbag. That is more likely to happen than not.
No final decisions have been made yet. And the Postal Service points out that its financial woes began with the 2006 law that requires it to prepay benefits to the tune of about $6 billion a year, which is a reasonable argument.
This task force doesn’t sit well with postal workers and their families, who spent part of the Columbus Day holiday protesting because they believe the White House is ultimately trying to make the U.S. Postal Service into a private venture, which frankly makes sense, considering the current state it’s in and the state of today’s delivery services.
Trump, a businessman more than a politician, is not one to tolerate an agency that is losing billions with no sign of turning things around. While he has railed about Amazon costing the Postal Service money, it would seem just the opposite. Without all those packages, the Postal Service would be even more in the red. Better leave Amazon alone.
The Associated Press reported that, in Chicago, workers rallied Monday near a downtown post office, carrying signs reading “U.S. Mail, Not For Sale” and “We Belong To The People, Not Corporate America.”
Good thing they don’t belong to corporate America. If they did, they wouldn’t be in business.
If you have doubts deliveries can be done so well as to be in the black, just check the earnings reports of UPS. But again, UPS doesn’t deliver advertisements and fliers. They deliver packages in such a way that they actually earn money.
In Washington, American Postal Workers Union President Mark Dimondstein told a crowd that privatization will mean less service and higher costs to taxpayers.
Really, how much would we suffer if mail was delivered, say, four days a week? And as for package delivery, competition between UPS and FedEx is pretty fierce already. Adding another delivery company to the mix would seem to push prices down, not up. And let’s face it, much of what comes in the mail are bills, advertisements. Thank you and birthday cards, while always nice to receive, are a bit rare these days, and no reason to support an agency losing billions every year.
Remember, the Postal Service announced it is closing the Lihue post office to save money, and will condense operations with its annex near the airport.
So, a task force to study what ails the Postal Service, and what can be done to fix it, would seem wise. One of the things the task force reviewed is the expansion and prices of package delivery, one area the Postal Service has shown an increase and shows promise. Again, take a look at UPS for a model of how to do this.
The task force, it was reported, has delivered its report on reforming the Postal Service to the White House, which plans on making it public after the November general elections.
Sen. Mazie K. Hirono, however, does not agree.
“To the more than 2,000 hardworking employees of the U.S. Postal Service in Hawaii, I stand in solidarity with you and strongly oppose President Trump’s push to privatize the U.S. Postal Service. Privatization means prioritizing profits over people. President Trump’s plan would hurt low-income and rural communities in Hawaii because servicing these areas is often less profitable than urban areas. Cutting or outright ending services would be devastating to so many communities throughout Hawaii and the country. We must stand together against yet another harmful effort by the President to hurt workers and our communities.”
While we appreciate the senator’s concerns, and applaud the dedicated Postal Service employees, the financial woes of the Postal Service can’t continue to be simply ignored because it is a government agency. If the senator has a proposal that could turn things around for the Postal Service, we and many others would love to hear it. Until then, we hope changes are coming to the Postal Service and the task force recommendations are sound and are implemented.
This editorial ignores one of the main reasons USPS is “losing money”. It is the mandate from Congress to prefund retirement and health benefits for employees who haven’t been born yet. This amounts to nearly $6B/year
H.R. 6407 passed the 2006 House by voice vote and the Senate by Unanimous Consent, giving the impression that it should have been “no big deal”. Unfortunately, this is not the case.
The Post Office is chartered in the US constitution, in article one section 8 as one of the enumerated powers of congress: “To establish Post Offices and post Roads”
Privatizing USPS would be a horrible mistake. USPS loses money because Congress wants it to lose money. This is the same kind of trick that is being used to set up the public for shutting down Medicare and Social Security and privatizing those functions. Both are grabs of the Oligarchy to take power out of the hands of “the rest of us” and concentrate all the wealth in the hands of fewer and fewer people.
Post agencies in other countries perform certain minor banking services. If USPS were to do this, it would be very profitable with the added benefit of providing such competition to the Payday Loan business that that “criminal” enterprise would find itself out of business.
The Truth About The Post Office’s Financial Mess
Just one brief comment.
Your article should have included the fact there is a 2006 law requiring the Postal Service to pay in advance for retiree health benefits. No ther Federal agency is required to pre-fund retiree health insurance. In addition, some of these “employees” are not even born yet……check it out. Remove this requirement and the red ink turns black. Thank you.
Hirono and her lack of intelligence is the problem! She’s a parasite Socialist without a clue as to what made America prosperous, or how to keep it that way. Vote the embarrassment out of office, SOON! Hawaii is damaged every day she is in office!
The US Postal Service is not funded by tax dollars, nor is it, strictly speaking, a government entity. According to Forbes, the USPS hasn’t been funded by taxes for 30 years.
Good letter. Another point worth mentioning is that congress used to mandate the prices for certain shipments via mail – such as “bulk” rate or “book” rate. These politically mandated rate structures were often at significant subsidy. Same as the flood of “junk” mail we now receive.
The costs of delivering a “junk” flyer and a first class envelope might be similar but the revenue the USPS earns is quite different. Make each class pay its fair share might also be a solution.
The USPS is an antiquated leach on taxpayers just like Mazie.
The Post Office does not depend on any tax money. It pays for itself. The only reason it isn’t making money is because Congress wants to give the impression to those Americans who cannot reason, that it is going broke. That way the Oligarchs who own American can “privatize it” so they can raise the prices, lower the service and screw the “rest of us”.
The Dude abides. The Duse does not complain about that which he knows nothing using false information!
Trump and others would like to privatize the USPS, TSA, infrastructure construction and about anything that is not already private. This means creating a middle man to whom the profits will go. And how will profit be generating by an entity losing money? Cutting wages and not setting aside the funds now required of the P. O. to cover future benefits.
Comparing the P. O. to the private sector companies UPS and FedEx is apples and oranges. The latter companies enjoy a package delivery service only. No adverts, no letters, no periodicals, no vacation holds, no forwarding mail for those who have moved.
Is this what we want? Cuts in service and employees earning less to profit private industry?
To put the Post Office costs into perspective with othe national costs, albeit taxpayers’ costs, We The People have paid already $900 Billion dollars into Afghanistan, a place much of which is literally living in the Stone Age. Afghanistan, a country with politico-religious-gang-issues in a countryside more akin to 10,000 years ago than today, with a donkey and wheel barrow driven economy.
What is the purpose of our involvement that is so costly in U.S. and Afghani lives and $billions, when the cheap use of Timothy Leary type psychological chemicals for the positive element and purpose of mind altering the soldiers and citizens out of the violence rut and into the peace and loving mind set preferred by most people who have been mentally turned off to warfare and turned on by “lovefare”.
Who could deny this turnover but the Military Generals and the CEO’s of the Military Industrial Complex. Instead of chemical warfare it will be chemical peacefare. There’s a twist on an old rut worn deep.
“Lovefare” substance passed around in cases of bottled water to combatants in that parched rocky terrain would bring a peace to the minds of Al Queda and ISIS combatants throwing down their weapons being too busy smelling the poppies instead of harvesting them and sending the contents back to the American inner cities…much like what ended the very bloody Vietnam War more than all the bullets and bombs, and more than the empty words of the politicians.
Coming back to point, but not forgetting the cause and effect of the woe of Afghanistan and it’s suffering people, and it’s countryside transportation by donkeys…just what did happen to the $900 Billion?…while the post office could easily drop mail service down to Monday, Wednesday, Friday, so long as the postal workers stayed busy somehow for the purpose of not losing their full wages; and pre-saving retirement incomes for postal workers not born yet, when the postal service appears to be going the way of Hula Hoops? All in the face of Social Securoty checks dropping to less than $50 a month for some of our seniors after a life of work.
Though in reality the postal service, like Mom and Pop stores, may well become a thing of the past, and mail may only come by internet and private carrriers…spam and bills are already converting to email; Isn’t it silly to receive million dollar real estate offers in the mail when you can’t afford to patch your tent on the sidewalks of the homeless section of your town?
Though “LS” brand acidic water could be delivered by the postal service to its counterparts in Afghanistan. A worthy Cause to keep around our Workers in Gray.
How disingenuous of the article’s author in purposely neglecting to discuss the prefunding of future retiree’s health care costs. No other governments agency is so obligated to do so. That prefunding mandate amounts to 5.5 billion dollars a year; equating to 55 billion over a ten year period.
Also regarding postal revenues, the author purposely neglected to mention that the postal service was recently required by its Board of Governors to reduce the price of stamps by 2 cents . That was a political move intended to place a financial burden on the USPS in a effort to move toward privatization. Why would the Board do this? The Board members are placed there as political appointees and serve a predetermined amount of time on that Board. Currently, the political party in power refuses to fill the vacant Board positions leaving only two positions filled.
Finally, the author neglected to mention that the Postal Service is obligated by law to deliver to every address in the country. Fed Ex and UPS refuse to deliver to inner city areas and rural areas. That is why the Postal Service delivers parcels from Fed Ex and UPS to these areas.
Maybe the next time this author writes an opinion article such as this, he should check out the facts first so his political beliefs do not taint what he says. Articles such as this are printed across the country in an attempt to sway public opinion by the powers that be in their attempts to privatize the Postal Service so their monied cronies can legally steal the profitable parts of the Postal Service and leave inner city and rural areas to still be delivered by the Postal Service. Just imagine how much money any company would lose delivering to just those areas.
Shame on the Garden Isle for even allowing this article to appear in print.