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Wednesday, September 2nd, 2015


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Going Postal Five Days a Week

Ben Franklin, the very first Postmaster General, would be rolling in his grave, or at least rolling his eyes. No longer is the USPS de facto motto “neither rain, nor sleet, nor gloom of night,” now it may be adding, “nor Saturday’s. Depending on Congress.”

The United States Postal Service is asking Congress to let them cut mail delivery to five days a week, in the hopes of saving approximately $2 billion a year. The USPS posted a $3.8 billion loss for 2009 and is predicting a loss of $7.8 billion for 2010.

The USPS isn’t trying to make a bigger profit. Believe it or not, according to Federal law, the post office is not required to make a profit. It is mandated to be revenue-neutral. This means it only has to break even. But, according to CNNMoney, “The Post Office was $10 billion in debt as of Sept. 30 — not far off from its $15 billion debt limit, which the agency expects to hit in its 2011 fiscal year.” That’s not quite breaking even.

Until 1950, mail was delivered twice a day. Then, like now, the solution was to cut back. If Congress does approve the change it will go into effect mid-2011. The USPS employs 600,000 people. It’s better to cut back a delivery day then lose that many more jobs. Last year they made “$6 billion in cuts, reducing its workforce by about 40,000 employees and chopping overtime hours, transportation costs and other expenses,” reports CNNMoney.

Why does Congress get to decide?
The USPS needs the okay from Congress before it can make changes; after all, it is a government agency. From the United States Code, “The United States Postal Service shall be operated as a basic and fundamental service provided to the people by the Government of the United States, authorized by the Constitution, created by Act of Congress, and supported by the people. The Postal Service shall have as its basic function the obligation to provide postal services to bind the Nation together through the personal, educational, literary, and business correspondence of the people.”

However, the postal service does have some very business-like qualities, including the power to sue and be sued, the power to buy, sell and lease property and the power to build, operate, lease and maintain buildings and facilities.

The Post Office does not receive money from taxpayers. It is supposed to be funded by its own revenue. In addition, the Postal Service is exempt from paying federal taxes, it can borrow money at discounted rates, and it can use the government’s rights of eminent domain to condemn and acquire private property. Oh yeah, Congress has an annual budget of $96 million for the “Postal Service Fund.” These funds are used:

  • to compensate USPS for postage-free mailing for all legally blind persons
  • to compensate for mail-in election ballots sent from US citizens living overseas
  • for providing address information to state and local child support enforcement agencies
  • for keeping some rural posts offices in operation

Important moments in mail history

The Postal Act of 1792 allowed newspapers to be sent through the mail at low rates, to promote the spread of information. This act also forbid postal employees from opening any letters unless they were undeliverable.

In 1970 the Postal Reorganization Act changed the USPS from a tax-supported agency of the federal government to a semi-independent federal agency, mandated to be revenue-neutral.

In 1982, U.S. postage stamps became “postal products,” rather than just another tax. Each class of mail is also expected to cover its share of the costs; this is why rates for different classes vary.

Here are some other important dates from the USPS website:
1775 – Benjamin Franklin appointed first Postmaster General by the Continental Congress
1847 – U.S. postage stamps issued
1860 – Pony Express began
1863 – Free city delivery began
1896 – Rural free delivery began
1918 – Scheduled airmail service began
1950 – Residential deliveries reduced to one a day
1963 – ZIP Code inaugurated
1974 – Self-adhesive stamps tested
1983 – ZIP+4® Code began
1992 – Self-adhesive stamps introduced nationwide
2006 – Postal Accountability and Enhancement Act signed
2007 – “Forever” stamp issued

That’s right, it took 18 years to get the self-adhesive stamp ready.

If the Post Office is going to survive it may have to start offering services beyond mail. Again, Congress needs to give permission for this. What do you think? Do we need mail six days a week? Last year mail volume was down 12.7 percent. This trend is not going to reverse, if anything, people are going to use email and automatic bill pay more, not less. If the USPS is going to continue to exist then something needs to change.

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One Response to Going Postal Five Days a Week

  1. PT says:

    I have two issues with your article. I have a problem with your lack of knowledge on the subject. I also have a problem with the fabrications you present as fact in it. At first I surmised that you probably got this misinformation from another web site, but I couldn’t find it anywhere else. That leaves you holding the bag.

    In your article, you stated the following: “Believe it or not, according to Federal law, the post office is not required to make a profit. It is mandated to be revenue-neutral. This means it only has to break even.”

    Your statement is a total misrepresentation of the law. At first I thought it was just a misinterpretation, but changed my mind once I understood what you are trying to do here. Here are the actual facts relating to what you said. The post office is in fact REQUIRED to NOT MAKE A PROFIT. It was REQUIRED to break even. The post office has made billions of dollars in profit over the years. It was taken from them and sucked into the general fund of the federal government. Congress has used the Postal Service as their personal cash cow and has the unmitigated gall to now take them to task for their financial performance.

    ————————
    You also stated, “Oh yeah, Congress has an annual budget of $96 million for the “Postal Service Fund” statement.

    Your figure of 96 million, it is incorrect. In addition, you must know that there is no such thing as an “annual budget” relating to congressional spending, yet you chose to mislead your readers instead. The Postal Service Fund in 2011 was 86.5 million dollars. In 2012 it was just over 78 million dollars. The appropriation for 2013 has already been submitted in advance and was for same amount as this year.

    Next I’ll address what you said those funds are used for:

    “To compensate USPS for postage-free mailing for all legally blind persons.”
    Is UPS, FedEx, or ANY OTHER delivery service required to provide free services for the blind? No they are not. This particular type of subsidy falls under the heading of “Revenue Forgone” and this type of “given up revenue” reached a peak in 1985 of almost 1 billion dollars. It wasn’t just the overseas voters and the blind you see (no pun intended), it also involved greatly reduced or free postage for non-profit organizations, local newspapers, churches, and publishers of educational material. I think you would agree that a Congressional “Postal Service Fund” of 78, or even 96 million dollars was in the overall scheme of things, nothing at all. If congress failed to give that tiny bit of money to the Postal Service, they would have the ability, by law, to charge these groups full postage. Once again, this fund and any other federal government payments to the Postal Service were fully intended to subsidize the mailing costs of these groups of mailers. Further, in 1993 The Revenue Forgone Reform Act was passed and most of these costs were shifted right back to the Postal Service. The only ones Congress still provided funding on is mailing for the legally blind and overseas ballots. The GAO states that this fund has fallen short of equaling Postal expenditures for these two groups of mailers by well over 100 million dollars. Just another example of Congressional orchestration of the demise of the Postal Service.

    “To compensate for mail-in election ballots sent from US citizens living overseas.”
    Almost EVERY voting citizen residing within the borders of this country has to pay the postage when submitting their mail-in ballots. Why should those living overseas be treated any differently?

    “For providing address information to state and local child support enforcement agencies.”
    Why should the Postal Service provide free services to other agencies seeking this information? Doesn’t the Postal Service also have the same budgetary considerations as those other agencies? They do and it would make sense to charge a small for these services, but the law now states that the Postal Service cannot do it.

    “For keeping some rural post offices in operation.”
    The “rural post offices” you are referring to are only open at all because of pressure put on the congressional representatives of those rural areas. Why should the Postal Service pay to keep those guys in office? Of course, congress has now prohibited (without approval) the closing of rural offices.

    None of the four examples you cited involve compensation that can be considered a tax or any other type of government support for the Postal Service. That money is FUNDED by Congress and is nothing but a self serving political gesture to keep them in office. It is interesting and dishonest that you omitted the primary reasons for this fund. Of course, those reading your article probably know less than you and accept your information at face value.

    Franked Mail
    That “fund” also pays for the free postage and franking privileges provided to Congress and other federal officials, current and past. Why should the postal service pay for congressional mail, most of which is used for political purposes? Although Franking reform has resulted in a huge reduction in these costs, there was still almost 13 million dollars worth of franking done by congress alone in 2011. The cost of franking before that was several times as high. The ONLY reason the postal service started receiving funds to cover the cost of franking, was to help curtail the out of control abuse of the privilege by congress.

    PRC
    The 76 million dollar “fund” also pays for the salaries and operation of the Postal Regulatory Commission. This independent (yeah, right!) commission reports to congress it has been receiving just under 14 million dollars per year.
    ——————————–
    Congressional Interference
    It makes no sense, nor is it in anyway fair, for congress to criticize the Postal Service for their current financial problems, when they are CLEARY the major cause of those problems. It is interesting that you had no problems mentioning USPS losses and projected losses, but you failed to provide ANYTHING at all relating to the reasons why it’s such a big issue.
    Here are the facts:
    2006 Postal Accountability and Enhancement Act
    Yes, the drop in First Class mail has greatly impacted the Postal Service, but why no mention of the other impacts? Impacts like the 2006 Postal Accountability and Enhancement Act. You mention it in your time line. You know, the one you ended with a sarcastic remark (about yet another subject you obviously know nothing about).
    The republican led Congress at that time did everything they could to hamstring the Postal Service. For instance, they made it law that the Postal Service must PRE-PAY retiree health care benefit costs in advance. And they must do it for the NEXT 75 YEARS! IN ADVANCE! AND THE HAVE TO DO IT IN ONLY 10 YEARS! This means they are ALREADY PAYING the benefits of future employees who HAVEN’T EVEN BEEN BORN YET!
    For your amazement and edification, here is the payment schedule: 2007- 5.4 BILLION dollars, 2008- 5.6 BILLION dollars, 2009- 5.4 BILLION dollars, 2010- 5.5 BILLION dollars, 2011- 5.5 BILLION dollars, 2012- 5.6 BILLION dollars, 2013 – 5.6 BILLION dollars, 2014 – 5.6 BILLION dollars, 2015 – 5.7 BILLION dollars and last but not least 2016 – 5.8 BILLION dollars. Even the staunch USPS enemy Ralph Nader said that law was insane.
    That totals up to 55.8 BILLION DOLLARS! Congress was also nice enough to leave this whole thing open ended.
    No organization, public or private has been required to operate under these conditions, EVER!
    If not for these crazy and unfair payments and despite the declining mail volume, they Postal Service would have turned a profit in each every year that has passed since this law was enacted. This fact clearly indicates that the Postal Service has recognized and successfully reacted to declining mail volumes.
    I guess I should throw in the quarter BILLION dollars that the Postal Service has to cough up EVERY YEAR to pay for the salaries and operating expenses of the Office of Inspector General.
    Gramm-Rudman
    But let’s not stop talking about Postal Service profits just yet. What do you know about the Gramm-Rudman Budget Reconciliation Act of 1985? I’m betting not very much. Well, I’m here to tell you about it.
    The Balanced Budget and Emergency Deficit Control Act was put into law in 1985. It is now commonly referred to as the “Gramm-Rudman Hollings Act,” or just as “Gramm-Rudman.” The act created a series of deficit targets meant to balance the federal budget by 1991. The Postal Service had been off the federal budget for most of the time since the 1970 Postal Reform Act. Thanks to Gramm-Rudman, they were put back on the budget in 1986. Before this time any monies that the Postal Service had were placed in segregated accounts. These monies (with permission) could be used for capital expenditures on equipment, property, etc. Now the money was put into the general fund and the Postal Service was not allowed access to it. Enter the Postal Service as cash cow to Congress in its efforts to balance the budget. The Postal Service was given huge cuts and was not allowed to access to their own money, then the money was taken from them.
    As a result of the 1988 and 1989 Budget Reconciliation Acts, the service was ordered by Congress to submit payments of 2.4 billion dollars to the Treasury Department They were then ordered to make large operating cost cuts and greatly reduce capital expenditures to cover that 2.4 billion dollar payment. As a direct result of these payments the Postal Service stopped work on 75% and 50% of capital improvements in 1988 and 1989. In addition, they suspended collection of mail and mail processing on the weekends, cut window service hours nationwide. I almost forgot! They also cancelled the delivery of mail on two or three Saturdays. The mailing public criticized the Postal Service and the Postal major mailers criticized the federal government, because of the massive cuts they had to make and for placing the service in the position of losing money and cutting service; when they had made money for several years. In other words, they were milking the cash cow and it wasn’t right. The major mailers made such a stink over this issue in Washington, that a bill was introduced and passed in 1989 that once again took the Postal Service off budget in 1990. Many people believe that Congressional agreement was timed to take the Postal Service’s deficit for that year (which congress caused in the first place), off budget with them. Thereby, allowing Congress to reach the requirements stipulated for that year’s budget.
    Postal Retirement Funding
    Try this one on for size…In 2002 the Office of Personnel Management announced that the Postal Service had overpaid into the civil service retirement fund for their employees. Overpaid to the tune of 75 BILLION dollars! This huge cushion could easily allow them to take care of the current financial hardship several times over. Yet, to this day that money is still sitting in there because CONGRESS will not allow them access to it.
    In 2000 the Postal Service was one of the pioneers in on-line bill paying and offered a secure and easy way to do so. Why did they stop that service? You might be wondering… Congress mandated that they shut it down. Hardly a surprise…
    I can go on and one, but my intent was not to write a book, but to just present a counter point to what is being served up by the media and swallowed whole by the sheep.
    —————-
    In closing…
    You either choose to ignore, or have no idea relating to the fact that the current Postal Service crisis has been deftly orchestrated by the current republican congress and moved into the main stream consciousness by the media. Why would congress have an interest in the demise and/or privatization of the Postal Service? That’s an easy one to answer. There are many plutocrats out there just licking their chops at the prospect of picking up even a fraction of what the Postal Service does now. Of course, once they do, it’s going to cost you a lot more to send a letter to your Aunt Jenney who lives a couple thousand miles away.

    The right wing media is of course, just eating this up! However, let’s not forget that the media in general has an axe to grind with the Postal Service that doesn’t even involve politics at all. Haven’t you ever thought it odd that television, radio, or the newspapers rarely, if ever has anything positive to say about the Postal Service? I’m sure you’d agree that the media invented and made the term “going Postal” mainstream enough to be included in dictionaries. Right?

    The Postal Service has a very high customer satisfaction rating with the American public. In fact, it is by far the highest of any agency even remotely related to the government. Why is then, that the media never has a kind word at all for them? The answer to these questions is so obvious that it’s hidden in plain sight. The Postal Service is in direct competition for America’s advertising dollars. The primary product that the post office delivers to each and every address in this country is bulk business mail, flyers, advertisements and everything related to it. Of course they have nothing good to say about their primary competitors. Newspapers are closer to extinction than the Postal Service is, so don’t EVER expect to see more than one or two positive articles about the post office in your life time.

    If you don’t think that there has been an ongoing battle to dismantle and privatize the Postal Service by Congress, you are not paying attention. The supporting documentation to all these things I said here is all public record.

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