What Do Cuts at the Post Office Mean to You?

The problems at the postal service may not be what you think.

As the second-largest employer in the United States (after Walmart) and the largest employer of union employees, the U.S. Postal Service is, to put it lightly, important.

As an affordable means for Americans to send and receive correspondence and packages, often next-day, the USPS is important.

As one of few government agencies deemed important enough by our founding fathers to spell out in the Constitution our Congress's "power to lay and collect taxes" for our postal infrastructure, the USPS is important. 

As the only delivery service required to provide coverage to all corners of the United States, regardless of how remote or sparsely populated, the USPS is important.

The USPS has been picked on lately. Some politicians suggest that its employee benefits package is causing the agency to go broke. Some assume the USPS is poorly run or even that it wastes taxpayer money.

A taxpayer drain it is not; the USPS is fully funded by postage. Congress has authority over the USPS, but our postal service hasn't been taxpayer funded since 1970 (despite the Constitution's instructions). 

While email, online bill pay and the recession most certainly have cut into its revenue, the postal service actually operates on a healthy business model; its woes are largely exaggerated and artificial. In fact, if the Postal Accountability and Enhancement Act (PAEA) of 2006 hadn't been signed into law by George W. Bush, the USPS would enjoy a $1.5 billion surplus instead of its massive deficit. 

This devastating act requires the USPS to pre-fund, within 10 years, 75 years' worth of future health care benefit payments for retirees. The PAEA puts a burden on the USPS required of no other government agency, costing the agency $5.4 billion a year since 2006. The USPS has also overfunded a separate retirement account by about $6.9 billion.

Private Shipping Costs More

The USPS's financial woes have made the news over the past few months with talk of eliminating Saturday delivery, cutting jobs, and closing half of its 500 processing centers and many underperforming post offices. So far, none of these cuts are in the south suburbs, but could still affect us. Any or all of these actions would certainly slow First Class delivery, inconvenience millions of customers and perhaps compel many of us to turn to competitors, such as UPS and FedEx, for shipping.

The loss of First Class mail (or the postal service altogether) would create huge inconveniences or expenses for people who rely on the postal service to deliver bills and prescriptions. The same goes for small businesses that use the postal service instead of internal or private parcel services and people who send mail to Canada, including people who work in one country and live in another. Not everthing can be paid online—yet.

The proposed postal service cuts have been pushed back until mid May. Hopefully a new plan will be in the works before then, preferably to remove or revise the PAEA. Cuts to the USPS would cause problems our economy can ill afford, hurting postal employees, businesses, regular citizens and the unemployment rate.

Matt Giordano January 06, 2012 at 02:00 PM
The cuts are necessary. It does not impact me. And yes, the USPS is important. It, however, is a business and should be run as a business and not as a "welfare case". It should consider delivering mail to residents 3x/week, not 6x/week. Maintain enough people and equipment to accomplish this and reduce the equipment and people not needed. Yes, it is sad to eliminate jobs. And yes, it is a reality that should probably occur.
Denise Du Vernay January 06, 2012 at 10:46 PM
Hey, Matt, the article pointed out that the USPS is not a business, nor is it a "welfare case" (not sure where you got that turn of phrase). The USPS is a self-funded government agency. It runs on postage revenue. The financial problem the USPS is facing is not due to "people and equipment"; it is due to the PAEA. If the USPS were a business (which is not what our Founding Fathers had in mind, by the way), it wouldn't be required to pay for 75 years' worth of future retirement benefits within 10 years (starting in 2006). The fact is that the USPS is a government agency, with all the downfalls of a government agency (being controlled by Congress, for one) but without the benefit enjoyed by other government agencies: taxpayer subsidization.
Matt Giordano January 07, 2012 at 12:03 AM
Hmmm...not a business? Yet it is to be funded by its revenue stream. In recent years it hasn't been able to produce enough revenue to fund its operations. As a result, the US taxpayer is on the hook to keep it going. It may be an institution of our Founding Fathers, but consider that it looks like a business, runs like a business, and takes taxpayer bailout money like a business. In my way of thinking, it is a business. Period! And as such, let it go the way of Pan Am airlines, Trans World airlines, and all the other enterprises that weren't able to manage their business. Who is John Galt?
Denise Du Vernay January 07, 2012 at 02:07 AM
Matt, The USPS is not a business; it is a government agency. There are hundreds of government agencies, such as the Army, the Mint, and the Smithsonian Institution. To learn more about government agencies and what they are, see www.usa.gov A huge difference between the USPS and all other government agencies is that the USPS, in addition to it NOT being taxpayer funded, is required to pay 75 years' worth of future employee retirement benefits within 10 years of the passing of the Postal Accountability and Enhancement Act in 2006. The USPS would have a $1.5 billion surplus right now if the PAEA hadn't passed, putting a $5.4 billion dollar burden on the USPS per year. As an entity with a $1.5 billion surplus, the USPS is certainly "an enterprise able to manage their business." The USPS has not been taxpayer funded since 1970, when the Postal Reorganization Act was passed. John Galt is a character in a novel by Ayn Rand.
Chuck Bermel January 07, 2012 at 03:01 AM
Denise I have been working at the USPS for the past 24 years, so I know a little bit about what is going on down in DC. The USPS actually is surpporting the taxpayer not the taxpayer surpporting it. You see the 5.5 billion is suppose to go in a fund for future benefits, but it does not it goes directly in the Federal reserve and reduces the deficit by 5.5 billion the year it is paid. In return the USPS gets an IOU redeemable in 75 years. Of course in 75 years everybody involved will be dead and USPS workers will here somthing like, we can not afford to pay ENTITLEMENTS today that were promised 75 years ago or better yet there will be no USPS. This is just another way to shaft middle class workers, the sad thing is it was a Republician sponsered bill that had bipartison support. this is the exact reason the U.S. is in the shape it is in one party steals from the middle class and gives it to the RICH and the other party steals from the middle class and gives it to people here illegally
Chuck Bermel January 07, 2012 at 03:22 AM
Denise Not only is the USPS not taxpayer funded it is just the oppisite, The USPS actually funds the taxpayer. Here is how, the 5.5billion you talk about goes straight into the Federal Reserve and reduces the deficit by 5.5billion in return the USPS recieves an IOU redeemable in 75 years. Of course in 75 years all involved will no longer be around.This is why congress does not want to fix what they broke, when asked why they just dont give the money back the answer was simple sorry we cant. When asked why simple answer again, It does not exsist there is no fund for future benefits 75 years down the road. Yet congress continues to lie to the public and people like Matt continue to believe what ever they are told. This is just 1 example why America is in the shape it is in today.
Patrick Franklin January 07, 2012 at 06:37 AM
Matt, read what Chuck just wrote and do some research. You'll be amazed at what you find.
MadInNJ January 07, 2012 at 04:47 PM
Absolutely right . . . and it would be great if Congress and the President applied the same rules to the money we pay into Social Security. The USPS is perpetually screwed unless it gets out from under Congress's thumb. It doesn't get any funding from the US Government, so why should it have, in essence, a board of directors that includes 535 people, all with their own agendas for keeping money and services flowing into their districts and states?
Chuck Bermel January 08, 2012 at 12:53 AM
Also in Jan. 2007 congress approved a 40 percent increase to all upper management retroactive to 2006, there increases were more than double what a lettercarrier makes in a year.This was done to keep the POSTMASTER General and his team of Cronies quite. Of course in the last 2 years many retired including the Postmaster General, they are laughing all the way to the bank. They have also dropped a ton of money on a fancy gym down in DC for upper management,they buyout upper managements million dollar homes and pay to move them all around the country. All this why sending congress a check for 100 million a week.They pay thousands of supervisers around the country to look at computer screens and see if a lettercarrier might have missed a scan point on his route, Every route has about 10 mailboxes with a barcode stuck on it that has to be scanned when mail is delivered. THIS IS MICROMANAGEMENT TO THE MAX. So dont believe all the rederic you here on FOX news. Those are just a couple reasons why the USPS is falling apart. The USPS has cut about 200 thousand jobs in the past 10 years, but guess where there was an increase in Postal employees? Yep DC more CHIEFS to watchover less Indians. If the republicans take over in Nov. they will CRUSH the middleclass and they will start with the USPS.
Denise Du Vernay January 09, 2012 at 04:33 AM
Thanks for your insight, Chuck.


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