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The president of one of the nation’s two largest postal unions, Fred Rolando of the National Association of Letter Carriers, is hailing the $610 million operating profit for the United Postal Service and said it bolsters calls for reform.
Meanwhile, USPS officials are also looking forward to profits this quarter, thanks to huge volumes of the political mail and a big hike in packages during the holiday season.
The USPS report showed that operating profit for fiscal 2016, which ended Sept. 30. And it would have been $1 billion more if there hadn’t been a mid-year cut in the price of stamps, Rolando said.
USPS now has three straight years of operating in the black, with a total operating profit of $3.2 billion since 2013.
“That’s impressive for a government entity that gets no taxpayer money – earning its revenue instead by selling stamps – while enjoying strong public support and providing Americans and their businesses with the industrial world’s most-affordable delivery network.
“Importantly, these operating profits stem from two ongoing structural factors: As the economy gradually improves from the worst recession in 80 years, letter revenue is largely stabilizing. And as the Internet drives online shopping, package revenue is rising sharply — up 16 percent this year –auguring well for the future. Record worker productivity also contributes,” he said. Leaders of other postal unions had no immediate comment on the figures.
The USPS report itself said the agency once again ran in the red, it said. But, the Letter Carriers chief pointed out, that “deficit” is again solely due to an annual enormous prepayment of future retiree health care costs, which a GOP-run Congress imposed a decade ago.
Even if the agency doesn’t actually pay that money, Rolando noted, it still goes on its books as red ink.
The postal unions and their congressional champions, led by Sen. Bernie Sanders, Ind.-Vt., have been campaigning for years for a postal reform bill that would both let USPS enter other profitable lines of service – such as postal banking, notary services and shipping alcoholic beverages – while eliminating the yearly prepayment.
But congressional Republicans on both sides of Capitol Hill, including newly re-elected Sen. Ron Johnson, R-Wis., who chairs the panel dealing with postal issues, have been cool to the idea of completely eliminating the prepayment, or letting USPS into other lines of business.
“The red ink you hear about has nothing to do with the mail but rather with congressional politics – the 2006 decision by a lame-duck Congress to compel the Postal Service to pre-fund future retiree health benefit,” Roland said. “No other public agency or private company has to do this even one year in advance; USPS must pre-fund these benefits decades into the future. That $5.8 billion annual charge is the ‘red ink.’
“The pre-funding issue can be readily addressed if Congress acts on practical, targeted postal reform.
“There is a strong consensus within a coalition consisting of the Postal Service, postal unions, businesses, mailers and industry groups, as well as key legislators, for a reform package that all stakeholders can buy into, including addressing pre-funding, allowing USPS to use its invaluable networks for some new products and services, and adopting best private-sector practices in investing the USPS retiree health benefits fund. Our coalition will work with Congress to overcome the short-term impact of the rate roll-back and move legislation.”