Letter carrier's view: Service cuts will further weaken postal serviceSince its inception two centuries ago, the U.S. Postal Service has served as a vital public institution and as a critical piece of our nation’s infrastructure. As the Senate prepares to debate the 21st Century Postal Reform Act, which misguidedly seeks to “save” USPS by degrading service, it is important to understand the real issues facing the postal service.
By: Fredric V. Rolando, Duluth News Tribune
Since its inception two centuries ago, the U.S. Postal Service has served as a vital public institution and as a critical piece of our nation’s infrastructure. As the Senate prepares to debate the 21st Century Postal Reform Act, which misguidedly seeks to “save” USPS by degrading service, it is important to understand the real issues facing the postal service.
The postal service provides the industrial world’s most affordable mail service while operating for the past 30 years entirely on its earned revenue — not, as many assume, on tax dollars. From fiscal years 2007 to 2010, the USPS enjoyed a net operating profit of $611 million delivering the mail.
The postal service does face serious financial challenges, but they’re not what you think. And most of the proposed “fixes” circulating in Washington, D.C., would worsen the situation. These proposals include canceling Saturday delivery; shuttering thousands of post offices across the country; closing numerous processing centers, including in Duluth; slowing the delivery of mail; and ending door-to-door service for many households and businesses.
Changes like these would hurt all Americans and cause disproportionate harm to the elderly, low-income households, those with limited Internet access, rural communities and small businesses.
In Minnesota, rural communities — many of which stand to lose both Saturday delivery and their local post office branches — would face particular difficulties as residents’ ability to access the postal system would become harder.
These changes also would hurt American businesses struggling to make it in a still-tough economy. The USPS functions as a critical link for American commerce. Our nation’s $1.3 trillion mailing industry, which employs 7.5 million people in the private sector, directly depends on a strong postal service. A 2010 study by the Envelope Manufacturers Association Foundation found that in Minnesota alone the mailing industry employs 184,826 people in the private and public sectors. Those jobs are being put at risk by these shortsighted proposals.
America’s small businesses — which create two-thirds of all new jobs — need dependable service, Saturday delivery and ready access to the postal system to ensure efficient business operations. Even private delivery companies, which often rely on the postal service’s universal network for the “last mile” delivery of packages to customers, would feel the impact of the proposed cuts.
Moreover, eliminating key services would not address the real and immediate financial challenge facing the postal service. The challenge is not related to the delivery of mail.
Rather, the real issue is a 2006 congressional mandate that compels the USPS to set aside enough money, in 10 years, to meet future retiree health-care benefits over the next 75 years. As a result, the USPS must make unnecessary payments of
$5.5 billion each year into an account that already is well-funded. These payments alone account for about 90 percent of the USPS red ink we hear so much about in the media and from Congress.
To date, the Postal Service Retiree Health Benefits Fund has accrued $42.5 billion, enough to cover decades of future retiree-health premiums. In fact, USPS already has pre-funded more retiree-health benefits than any other company in the United States and is the only public agency or private firm required to pre-fund retiree health care. By comparison, most Fortune 1000 companies don’t pre-fund at all, and those that choose to do so pre-fund at much lower levels.
Seeking to solve the postal service’s financial challenges by cutting services — instead of addressing the real issue of congressionally mandated pre-funding — is not the answer. In fact, such cuts would prompt the very same downward spiral the postal service is seeking to avert, as reduced levels of service drive customers away and revenues decline.
Given the seriousness of the issue, and because these changes would affect every American resident and business, Congress should act to strengthen the postal service, not weaken it through needless cuts. To resolve the USPS’s immediate financial problems, Congress should repeal the 2006 pre-funding mandate and work with all parties to pass balanced reform that builds a postal service for the 21st century.
Fredric V. Rolando is president of the National Association of Letter Carriers, based in Washington, D.C.