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The Real Reasons behind the Postal Service’s crisis

28 Oct

United States Postal Service

United States Postal Service (Photo credit: Wikipedia)

First of all, let me state for the record that I like the Postal Service, and have been a customer of theirs since I was a teenager. They were doing okay financially  for a while.  Fact: from 2003 to 2006  (well into the digital age) the PS reported a cumulative net income of 9.3 billion. What does this tell us? They were  doing well during those years.  Additionally, their  best years of record were 2005, 2006, and 2007. Then 2 big things happened.  The recession hit, and like everyone else, the PS suffered from the effects of it. When there is no money for people to buy stamps, or to send packages, it affects the PS as well. When the economy is good,  businesses send mail. When it is not, like everyone else, they cut back.  Second, Congress passed the “Postal Accountability Enhancement Act in 2006. What this basically did was to insure that the health coverage for postal retirees to be paid 75 years into the future.  For this to happen, Congress required the PS to pay 5.5 billion a year for 10 straight years!  What is really interesting about this is that there is no other government agency or private company is required to do this. So the PS started off each year with a 5.5 billion dollar bill each year. Any business that is forced to have this over their head is naturally going to have a crisis.  An interesting fact is that the PS was not having financial difficulties until Congress passed this bill. The PS would have had a 611 million surplus if not for the bill passed by Congress. But the PS had another added twist to their woes.  It seems that the PS  had been overpaying  into their worker pension funds. An audit by the Inspector General’s office showed an overpaymentof $75 billion, while a second independent analysis by the Regulatory Commission show the overpayments at $50 billion! Consider this important fact. If the PS were a private sector business, it would  have been able to make significant cutbacks  and stop these payments before reaching this point. The fact is, they are bound by unique laws and Congressional mandates. So the fact is the internet has both hurt and helped the PS. People order items online and the PS delivers their packages. UPS, and other agencies don’t have a monopoly on deliver service at this time. The PS does their fare share of internet deliveries.

761,004,005 People Worldwide Use the Internet

761,004,005 People Worldwide Use the Internet (Photo credit: Thomas Hawk)

The internet cannot be blamed for the current financial woes of the PS especially when they have had significant mail volume over the last four years.  Congress has forced the PS with an unfair burden of expected of nobody else: they must pay their retiree health benefits now for employees who haven’t even been born yet!  If the PS could get credit for overpayments into its retirement fund something only Congress could authorize this would alleviate their current financial problems. Right now, there are bills in Congress that would solve their problem, but there are also proposals to block the help to their problems. It would seem that this is more of a political problem and not a financial one. So my question is has  Congress done this as an excuse to put the Postal Service back into private hands?  The PS insolvency could have real-world consequences that will affect the communication and commerce of every citizen as well as those who are unemployed. The PS is at the mercy of Congress to do anything about their problem. It has proposed cutting back on services, laying employees off, and discontinuing Saturday delivery, something that Congress must first approve. Also, on January 27, 2012, the Postal Service will increase the cost of a first class stamp by one cent, from 45 to 46 cents. They are not asking for much, and personally, I think they should have asked for a 3 cent increase. They deserve it! 

So this is what I propose. Find the names of your Congress person and email, call, or write them. Ask them to take the chains off of the Postal Service, and to help them resolve their financial problems. Tell them that you feel the current mandates by Congress forced upon the Postal Service are not right, and that if they want your vote at re-election time, they had better  do something about it!

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