The U.S. Postal Service lost $5 billion over the past year, which is more or less what it predicted, but near accuracy in prognostication does nothing to help with the long-term problem of survival. For that, the agency desperately needs Congress.
Postmaster General Patrick Donahoe continually finds himself in the unenviable position of trying to extract legislation out of lawmakers that would allow the post office to have a fighting chance. It should be given the opportunity.
Otherwise, the reports will always involve some measure of deep financial loss. This is the agency’s seventh straight annual loss despite growth in revenue since 2008. Operating revenue rose 1.2 percent to $66 billion because of the post office’s package delivery business and higher volume in standard mail.
But those gains are meaningless due to an ill-conceived 2006 congressional requirement that it make annual $5.6 billion payments to cover expected health care costs for future retirees. The idea of prefunding retiree health benefits for the next 75 years is ridiculous. It is harmful, and the post office stands alone in being required to fulfill such an onerous duty.
It leaves the struggling agency no other choice but to grasp at straws. And that’s exactly what is happening with several cost-cutting measures it has pushed, including requesting an emergency rate hike in the cost of a first-class stamp from 46 cents to 49 cents. It’s up to the independent Postal Regulatory Commission as to whether any increase occurs, although it won’t likely make much of a dent in cost-control.
The agency infamously – at least around here – reached for other cost-cutting measures, such as trying to close the productive William Street processing center in Buffalo and transfer that work to Rochester. It would have reduced efficiency and increased delivery times in Buffalo, the opposite of what the Postal Service should do. That plan was scrapped; hopefully never to be revived.
Donahoe said the Postal Service saved $1 billion over the past year by consolidating 143 mail processing centers, eliminating 1,400 delivery routes and modifying retail hours in 7,000 post offices. It has also reduced its career workforce by 37,400 through attrition.
While the $5 billion loss is less than a third of the record $15.9 billion loss the Postal Service reported last year, it is no less troubling. The bright spot is a lucrative deal with retail giant Amazon to begin package delivery on Sunday. In an increasingly technological age where more and more consumers are doing business via the Internet, perhaps the agency should have begun similar deals a long time ago.
The Postal Service is no longer funded by tax dollars, yet Congress maintains too much control over its activities. The crippling effect of insisting that the post office prefund retiree health benefits has to be reversed and lawmakers must work on a long-term solution that relaxes such control.