USPS “loses” $3.3 billion (but Congress knows exactly where it is)

April financial results posted by the USPS show an operating loss of $83 million for the month of April, bringing the year to date loss to $112 million. Not bad for a company struggling with the recession and electronic diversion. Unfortunately, though, despite managing to virtually break even, the USPS then has to turn over almost half a billion dollars a month to the “Future Retiree’s Health Benefit Trust Fund” established by the 2006 postal “reform” law, PAEA. The prefunding requirement pushes the $112 million year to date loss to $3.3 billion.

The “prefunding” charade seems to have morphed from a way to siphon off USPS profits (yes, the USPS was profitable until PAEA came along), into the classic right wing “starve the beast” strategy. That strategy uses massive tax cuts, especially for the wealthy, to create budget deficits that are then blamed on public employees and so-called “entitlements”. In the case of the USPS, Congressmen like Dennis Ross and Darrell Issa have found it convenient to pretend that the prefunding requirement is simply being “prudent” (even though no one else does it), and that the real cause of the postal service’s financial crisis is that employee wages are too high. The financial results give the lie to that position- of the $3.3 billion USPS year to date “loss”, $3.2 billion is accounted for by the prefunding requirement.

Having said all that, the “real” April numbers are still scary: total mail volume for the month was down 4.5% compared to the same period last year (SPLY), with first class volume down 9.1%. Standard Mail volumes, which had been doing better than the prior year, were almost flat. The only bright spot was shipping services, which showed a 9.4% increase in revenue. Overall revenue was down 2.9% for the month, and 2.7% year to date.

Total expenses for April were up 3.3% from SPLY. The increase was driven mainly by non-personnel costs, particularly transportation and fuel; as well as the prefunding charge. Actual compensation paid to employees was down 1.1%.

USPS April 2011 Financial results

  • csrs employee

    if you get rid of all csrs people by way of a nice offer or make it manditory, then you could stop funding retirement for a while. da

  • brian

    The fact that you would like a fat retirement bonus doesn’t mean that giving you fat retirement bonus will solve the postal service’s problems.

  • William Tyndale

    The “financial catastrophe” narrative that’s now playing serves the interests of two parties. First, it gives the Republicans a drum they can beat nearly every day proclaiming the wastefullness and incompetence of government. This narrative doesn’t rely on facts, actually it seems to run away from anything factual, which means that it needs to create talismans of waste. the Postal Service has become such a talisman.
    Perhaps of more importance is the way PMG Donahoe has used the “crisis”. He pays lip service to the need for reform in the area of pre-funding and retirement funding but his agenda is served by the continued instability. His strategic plan essentially calls for transitioning the Postal Service from a service organization guided by the mission of fulfilling the USO to a more corporate entity focusing primarily on the business of mailing.
    As presently conceived that vision requires the closure of several thousand small retail facilities, something Congress would likely never sanction without some sort of political cover. The continued portrayal of a dire and dismal future furthers the narrative and gives the necessary cover for the kind of drastic change in mission that Mr. Donahoe envisions.
    This isn’t about solving a problem, it’s about a radical restructuring of the purpose and mission of the USPS.

  • the man

    one billion a year can be save if get rid of POOMS then the bean counters,report readers more district offices Starting with Florida why do they need 3. keep it simple stupid

  • M. Jamison

    I am amazed at the comments that continually show up on these Blogs suggesting that the Postal Service could be saved if either a) some sort of bonus, incentive, or other initiative were offered to some particular class of employee, or b) the Postal Service would simply eliminate all its managers.
    VERAs, buyouts, and incentives are strictly limited by OPM rules and cannot be changed without legislative adjustment. Given the current legislative climate what do you think are the chances of that happening? And even if some magically attractive incentive were available cutting more jobs really isn’t much of a plan.
    Yes, postal management has serious problems that start at the top but it’s pretty clear that no one with any power is willing to address those problems.
    Getting a nice buyout or getting rid of a crappy supervisor may be the answer for some individual but it doesn’t begin to confront the problems facing the Postal Service. As William said above, the current strategic plans seem to be grounded in milking the crisis atmosphere. Nothing coming out of L’Enfant Plaza looks capable of addressing the short term problems facing the Postal Service let alone the long term issues.
    No one in Congress has offered any plan or vision that presents a serious alternative to management’s plans and no one is listening to the PRC or the OIG in terms of having the kind of conversation that would let us redefine the Postal Service for the 21st century.

  • bubba

    ross and issa are a couple of idiots they should be pooms neither does any work

  • Mailer

    M.Jamison,
    Middle management is the most reviled and unappreciated position in any company. They are the target of ire from above and below. The executives blame them for employees’ failures and the employees hate them for being executive taskmasters. Competent middle managers are hard to come by because they are squeezed from both sides and are eventually run out, get run over or run down. Once you see a first-rate manager/supervisor in action you begin to realize how much better a company would run if fully stocked with good people in such jobs. Sadly, unless someone unimpeachable like a CEO is protecting the good ones, they soon leave and we’re left with Peter Principle case studies.