NALC’s Rolando: If stamp prices hadn’t dropped, USPS would have been profitable

WASHINGTON—If the price of stamps hadn’t dropped last year, the U.S. Postal Service would have finished fiscal 2017 with a $1.2 billion operating profit, not an $800 million loss, Letter Carriers President Fredric Rolando says. But because the rollback occurred, USPS lost $2 billion in revenue, he added.

Postmaster General Megan Brennan announced the financial results for the independent USPS – which receives no taxpayer dollars — on November 14. It was the 11th consecutive year the USPS ran in the red, but the last several years, since the official end of the Great Recession, it has run a profit on operations.

Officially, USPS kept running in the red overall because in 2006, Congress – then as now GOP-run – enacted postal “reform” legislation. The law forced USPS to prepay $5.5 billion yearly to cover future retirees’ health care costs, to be incurred over the next 75 years.

The payments have technically thrown the agency into deficits every year since, and combined with the recession, created a cash flow crunch in 2008-09.

Brennan’s predecessor tried to stanch the red ink by schemes to fire 100,000 workers, let another 100,000 go by attrition, close thousands of post offices and hundreds of mail sorting centers and privatize stamp sales through non-union, low-paying Staples stores.

Postal workers, their congressional supporters and a mass public campaign stopped his schemes, except for the Staples plan, and courts ruled it broke USPS contracts with its unions.

Rolando alluded to the prepaid retirees’ health care costs in his statement. Both postal unions and Brennan want the current GOP-run Congress to repeal that mandate.

“With the original stamp price, the annual figure would be on a par with those of the past three years, which had a combined operating profit of $3.2 billion,” he pointed out.

“We would be talking about a government entity producing an impressive operating profit through earned revenue. The April 2016 rollback in stamp prices was the first since 1919, and it makes little financial sense because the Postal Service already has the industrial world’s lowest rates.”

The federal Postal Regulatory Commission is now reviewing postal rates, as the 2006 law mandates, and may adjust them above the inflation, Rolando noted.

“Meanwhile, Congress should address the pre-funding burden, which requires USPS — alone among all public and private entities — to prefund future retiree healthcare benefits decades into the future. This produces an onerous annual burden of billions of dollars.

“Addressing these external financial burdens would allow USPS – which is based in the Constitution and which enjoys broad public and political support – to continue providing Americans and their businesses with the industrial world’s most affordable delivery network,” he concluded.

The other postal unions – the Postal Workers and the Mail Handlers-Laborers – issued no immediate statements on the USPS financial report. They too support repeal of the prepaid health care money. Unions also back a bill by Sen. Bernard Sanders, Ind-Vt., to let the USPS earn money other ways, such as becoming a basic “bank” offering accounts in unbanked areas of the U.S., letting it ship beer and wine, and letting it offer notary public services.

Source: PAI