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%.