What you might not know about the Post Office

By Sharon Lauro

As of August 1st the postal service will stop delivering mail on Saturdays in order to cut costs. But the postal service does earn a profit and doesn’t use taxpayer money. Its financial troubles are not for the reasons you may think.

The primary reason the post office is bleeding money is a 2006 Congressional mandate, brought on by the Republicans who were in the majority, that forces the post office to prefund their retiree benefits DECADES into the future, including for employees who haven’t even been born yet!


No other company, public or private, is required to prefund its retiree account. Were it not for this mandate, the post office would be solvent. The postal service doesn’t use a dime of taxpayer money. Even with more people using the internet to pay bills and communicate, the postal service is still profitable.

This is the equivalent of a law forcing YOU to put a few thousand dollars of your income into an account for your future grandchildren’s college education. Every month. Regardless of whether you can afford it, and in spite of the fact that your own kids are still young and who knows how many grandchildren you’re even going to have?! You’ve gotta cough up this money every month. Even if you meet your monthly expenses were it not for this law, you would very quickly find yourself in financial straits, and cutting out every possible expense: cable tv, eating out at restaurants, etc. But these cost-cutting measure would be a drop in the bucket compared to what you need to pay each month to abide by the law about saving for your grandchildren’s college.

The Republicans are hellbent on privatizing everything, and their 2006 mandate was the first nail in the coffin to destroy the post office too. But destroying the post office will hurt small businesses (which they claim to care about). I have a neighbor who owns a dog grooming shop. She can’t afford radio or tv ads. But she does advertise in the coupon magazine that’s microtargeted to this local area. She can afford to send out bulk rate postcards to people in the vicinity of her shop. How else is she going to get the word out about her business? Junk emails? Who reads those?

Most letter carriers earn middle class wages and get health benefits. They can support their families and put money back into the community by paying taxes and being able to afford to patronize local businesses. For example, my husband is a letter carrier and we send our kids for gymnastics class at a locally owned business. Being a career letter carrier means that he cares enough about his job to do the right thing when it comes to delivering packages. The postal service has begun to hire temps who get low wages and no benefits. What is the incentive for these temps to not go through people’s mail to see what they can steal?

I see so much misinformation about why the postal service is in trouble. Most news reports barely mention the biggest issue, which is this 2006 Republican mandate that forces them to prepay $5.5 billion a year. People think that taxpayers are funding the postal service, which isn’t true either. The postal service is actually self-supporting and even profitable, not including this prefunding requirement. This is yet another blow to the middle class.


Below is a comment made by a friend who works for Cisco and said that the USPS was one of their clients.  He wrote this below my status update.  Maybe this can be added below my post.

The USPS is a chartered private institution. It isn’t a Federal Agency at all.  Thing would be great if they could they would take their 18th century charter, which dictates some pretty crazy stuff, and throw it out the window.  At 37,500 store fronts, millions of credit card transactions, 300 distribution centers and the world’s largest intranet outside the US Defense Department they could do so many amazing things if they dropped that charter. If the USPS was a corporation it would be in the global fortune 100 in annual revenue. They were in the black until the US Treasury (a US Federal agency) decided that while there was no public or private precedent – they would require the USPS to pre pay for retirement health benefits for employees (wait for it) that weren’t even born yet. After stealing billions the USPS went before Congress and demanded the money back. The Treasury Department said they couldn’t repay the USPS because it had loaned out the billions the USPS was forced to pay.

Again, there is some pretty cool stuff the USPS could do to evolve to come into the 21st century. Throwing away their charter is the first step. Look at Deuche Poste and the Swedish Postal Service as examples. The German former govt chartered agency is bigger than UPS at this point and much more profitable. The former Swedish carrier is a successful electronic payment company. What is exciting? If USPS is successful in modernization they could make the former two look like chump change.

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