Carper: $1.1 billion USPS operational profit = “downward financial spiral”?!

Senator Tom Carper reacted yesterday to the US Postal Service’s quarterly financial report by breaking out the cliches. Carper said that the $754 million “loss” the USPS reported was proof that the agency is in a “downward financial spiral”, even though the “loss” was entirely due to the 2006 PAEA law that Carper backed, and that he claimed at the time would solve the postal service’s financial problems. (Carper’s press release actually refers to a $754 billion loss!).

Carper’s statement ignores the fact that without the PAEA accounting entries, the USPS actually made a $1.1 billion profit from operations, and that the “loss” exists only on paper. It also fails to mention Carper’s own role in causing the “loss”:

WASHINGTON – Today, Senator Tom Carper (D-Del.), ranking member of the Homeland Security and Governmental Affairs Committee, released the following reaction to the announcement that the U.S. Postal Service lost $754 billion [sic] in the first quarter of fiscal year 2015:

“Today’s financial report shows that even a prosperous package delivery service and record holiday delivery season can’t bring the U.S. Postal Service out of its downward financial spiral. The hard reality is that the Postal Service continues to suffer unsustainable losses that threaten its long-term viability and is unable to raise enough revenue to cover its costs. While Postal Service leadership has done what it can to cut costs, keep prices competitive, and right-size the enterprise, the ailing agency needs comprehensive postal reform. It is critical that Congress works together to pass a bipartisan and comprehensive bill as soon as possible.  This news should underscore that sense of urgency. I look forward to working with my colleagues to build on the significant progress Dr. Coburn and I made on postal reform last Congress and renew our efforts to fix the serious, but solvable challenges facing the Postal Service.”

via Minority Media| Homeland Security & Governmental Affairs Committee| Homeland Security & Governmental Affairs Committee.

With friends like Tom Carper, you almost get nostalgic for Darrell Issa!

  • Dave

    Your article would be more credible if you would proof read you state a 1.1 billion profit then then a 754 million loss. Then a 754 billion loss in first quarter of 2015

  • postalnews

    Dave- thanks for pointing out the “$754 billion loss” typo. That is actually from Senator Carper’s press release, not me.

    As far as the difference between the $1.1 billion profit and Carper’s $754 million “loss”, that is the result of the PAEA charges, which I think almost all of our readers are already familiar with. You might want to read the previous article here.

  • retired too

    Why can’t this guy just admit that the PAEA 2006 was a mistake?

  • bob

    its postal math or is it congressional math !!! please eliminate saturday mail 2 billion saved a year

  • Joe

    that wont save any money do delivery on Saturday will end up costing revenue..you want Saturdays off? quit!

  • fred

    Operating profit is NOT profit! If I borrow $300 cash from a payday lender this month and must pay back $400 next month, I don’t have a $300 profit this month! Even PAEA opponents acknowledge that retiree health liabilities must be funded eventually. And this is shown on the USPS 10-Q. Currently, the USPS has total net deficiency of 46.085 billion dollars, and it’s getting WORSE. Complaining about “imaginary” paper liabilities doesn’t make them go away! The USPS needs reform, not talking points.

  • Barry Jones

    The US Postal Service in in DIRE TROUBLE because Republicans want to give it away at bargain basement cost to their buddies in UPS, and FED EX, and double their return by breaking the biggest public workers union… This Senator, TOM CARPER IS A LIAR and a THIEF; and if he would lift the crippling restrictions the GOP put on it, and leave it alone, OUR Postal Service will continue to function most efficiently.

  • Liam Skye

    Annual retiree health premiums can be paid each year just like every other company in the world. There is absolutely no good reason for USPS to lend that money to the US Treasury in advance.

  • retired too

    wrong analogy The USPS was funding its health care liabilities at a prudent standard rate. The PAEA required an unnecessary accelerated rate. The 10-Q reflects this charge and is an imaginary deficiency.The USPS is funding its obligations through postage paid. Since the PAEA is currently the law the service must report this accelerated rate charge even though unnecessary therefore resulting in a supposed loss. However the truth of the situation is that all obligations are and continue to be adequately funded. This is truly a political situation not an economic one.

  • Bob

    Carper=Crack

  • freecountry

    Good call! But the Bob won’t lead by example and leave!! He would rather just cry about it because it is obvious his job isn’t one that would disappear!

  • Retired Mail Handler

    Seems like Senator Carper is off base. The USPS did well last quarter. Yes, the USPS will need to pay its health bills. The present pre-funding for the health benefit plan for future employees is too harsh a measure. Congressional people expect too much from the USPS while hampering it from financial solvency.

  • OTH Guy

    Just to get your facts straight. Carper is a Democrat. But lets not let the facts get in the way of a good rant…….

  • The Truth

    Tom Crapper is actually a Republican who affiliates himself with the Democrats so he can get re-elected and votes with the Republicans as his horrible bill,S.1486 showed.

  • Barry Jones

    I don’t think I called him a Republican. The law requiring the crippling and unreasonable millions be paid annually into their pension fund, was snuck in at the end of a legislative session back in 2006, without a vote, by Republicans, as a payback to UPS and FED EX, who want the Postal business. And… like I said, it’s a two headed attack that not only breaks up the USPS (that we own), it would also break the biggest public workers union, which of course the GOP had not even considered… much.

  • IIlIIl111

    Oh, so republicans fully support the Postal Service and are against Privatizing it or cutting its budge in any way?????? I must have missed that story on Fox news……………. DUH

  • IIlIIl111

    Paying 75 years of obligation in 10 YEARS is paying it back “next week” NOT next month.

  • brooklyn

    No job loss USPS will have an early out

  • N2u2Doll

    I think the confusion regarding calling anyone a Republican lies with the term GOP, which is the Republican party. BTW the Postal Reform Act which was passed in 2006 & was co-sponsored by Democrats Danny Davis & Henry Waxman. It’s too bad, that at the time of the introduction of this bill, the Union saw no concern for the requirement of pre-funding our health benefits. The process has been slow in the realization to the ones that matter, that this pre-funding of “health benefits for retirees” is detrimental to the Postal Service. We need to support & be involved to get S.1486 passed.

  • N2u2Doll

    The new version of S.1486 prior to the adjournment addresses a solution to pre-funding,
    offering up new products, pension evaluations,
    & language to stop plant closings. Dropped the language to eliminate Saturday delivery. And also dropped the language of attacking postal employees pension benefits

  • Not Indoctrinated

    Typical american new world order crap from one of our communist leaders in the senate.

  • Zues

    Yes,but it requires the Postal Service to pre-fund OWCP ,doesn’t stop the current plant closings,only has a mail volume thresh hold that allows for further closures, allows for the possibilty of management to take employees out of FEHB and start their own health benefits system and interferes with collective bargaining by requiring arbitrators to consider the finances of the Postal Service which management will try to make look bleak. Not a well written bill with too much Coburn influence.Management still needs to be kept in check in any new bill.

  • freecountry

    Won’t happen for carriers!! Name the last time there was one for them. Not saying it wouldn’t make sense and get thousands of CSRS people off the rolls, but we are dealing with politicians here so…..

  • freecountry

    Haha. That’s funny! The GOP wants to cut our pensions and destroy the USPS unions! Despite that we employ more veterans than anybody but the Pentagon. Then they’ll be standing up and screaming “support the veterans.” Sick….

  • m

    What “Retires Health Care”? To my understanding….. When a postal worker retires, he pays 100 percent of his health care ! There is no obligation to the Postal Service to fund ANY health care to anyone when they retire….or am I incorrect in this?

  • JG4th

    of course not you are too important… you touch the mail…

  • JG4th

    you incorrectly understand …. the USPS pays about 70% of my retirement healthcare… and I still participate in FEHB every open season…

  • Miguel

    It doesn’t save any money. It costs MORE than it “saves”. The same amount of mail is just delivered with 1 working day less… which means the other 5 days will be longer and more costly days.

  • OTH Guy

    Thats not what I said. You make it out that its only the evil Republicans who are to blame for all USPS woes. Its both these guys. Neither side wants to give an inch in their ideologies. The USPS needs to define its new direction and not have this continual bickering keep it from moving forward doing the things we do well. DUH…..

  • OTH Guy

    Sure you did. You lumped him into the discussion on what causing our financial issues. Anyone who doesn’t agree with your view of the situation is a Republican or not a real Democrat. Like ot or not,the USPS needs to make changes as we move forward. So the sooner they stop the us versus them arguments, then maybe something can get done.

  • OTH Guy

    So if he voted for example against the Keystone Pipeline he is a true Democrat, but if he votes against your view of the world, he’s a traitor and not a real Democrat. Way to play both sides of the coin.

  • postalnews

    Yes, you are completely incorrect. You DO pay a slightly higher premium when you retire from the USPS, but you are not paying the whole cost of your insurance- far from it!

    The USPS pays a higher share of health insurance premiums for active employees than other agencies do. When you retire, you lose that extra contribution, but the USPS still pays the vast majority of the premium. For example- Blue Cross Standard Family costs a USPS retiree or regular federal employee $462.17 a month. The TOTAL premium, though, is $1,434.07 a month. The difference, $971.90, is paid by the USPS.

  • postalnews

    Not all of the unions supported PAEA- the APWU opposed it. While I’m sure that the other unions regret supporting the bill (and try to avoid mentioning the fact that they did support it), it was seen at the time as the only way to at least keep the money earmarked for an eventual USPS expense, rather than seeing it fall into Congress’s bottomless pit. Remember that the USPS had already been paying an extra $5 billion or so into the CSRS fund every year- it wasn’t a completely new expense for the USPS.

  • N2u2Doll

    You are correct! I was lazy & relied on friend working the political field input, but went & read the current version. I’m going to try & keep on top of these bills to keep my members informed. Too bad they do not realize that the political world of the Postal Service concerns them now& even after they retire. Wish there was more involvement. Thanks

  • freecountry

    It’s more the “evil Republicans” than it is the others. How many GOP are for the working class? Is that why the Kock brothers are donating $889M to the GOP to help us peons. Right…….

  • OTH Guy

    And how does George Soros, the $23 Billion Democrat backer fit into your poor Democrats middle class narrative? Please enlighten me………

  • common sense

    News flash: no one who isn’t wealthy has any real power in politics. I don’t care how rich Soros is, or Obama, or Nancy Pelosi, or anyone else. I vote for rich people who will vote for things that benefit me and other middle class working Americans. At the moment, that pretty much rules out almost ALL Republicans, and many Democrats (i.e. Tom Carper).

    The fact that right wing ideologues like to ignore is that the Democratic Party is far from a left-wing outfit these days. It was taken over long ago by corporate types like the Clintons and Obama. So most of us end up holding our noses and voting for the lesser of two evils every election day.

    I don’t care if George Soros is wealthier than the Koch brothers- I only care about the people and issues he supports.

  • Dumb Dude!

    Carper is another example of why term limits need to be established! All that was done here was simply repositioning chairs. It no longer matters if you are Democrat or Republican. Having the courage to do the right thing in trying to save our country’s most cherished service is paramount! Anything less is a fabricated set up to fail situation!

  • cdc

    I have on question for Carper. What is the point of funding health benefits 75 years out, for people that haven’t even been born yet. When if you and your buddies have it your way, their will be no postal service? You and Susan Collins screwed up the Postal Service with your 2006 reform bill. You, collins and potter said the 2006 reform bill, would save the postal service. You’re the last person anyone should be listening to. You have an agenda, just get if over with, instead of trying to pretend you care about the Postal Service’s well being.

  • cdc

    People need to understand, that any money given in advance for the purposes of holding it for future employees, is already spent. Just like the CSRS pension, social security and medicare pensions. Even though we have been paying into these beneifits for a life time. This money is only on paper. There is no secure account somewhere that all these funds are fully funded, waiting to be drawn down. Again, it’s all only on paper, the money is not there. The U.S just prints more money. When the world currency shifts away from the U.S. currency, we in the U.S. will all be screwed out of what we were promised, by our super rich law makers. They will be the only ones that will make out.

  • postalnews

    Wrong. The trust fund is a real account in the Treasury. As of the end of fiscal year 2014, it had a balance of $48.85 billion. That money will be used to pay for retiree health benefits beginning next year. According to the USPS Annual Report, the trust fund “consists entirely of long-term, special-issue U.S. Treasury securities with maturities of up to 15
    years. The long-term securities bear interest rates ranging from 1.38% to 5.00%”

    The “money has already been spent” myth is pretty popular, but there’s no truth to it.

  • Mr.Postman

    Then what was Collins,Davis,and Waxman’s motive for sponsoring and slipping this ridiculous bill through in a lame duck Congressional session? surely,Davis and Waxman did not want to see the Postal Sevice go under and be privatized and sold off in pieces as Donahoe/Brennan are doing?

  • Liam Skye

    You are delusional. USPS is not borrowing anything from payday lenders, Tony Soprano, or anybody else. It’s profits represent the amount of revenue over and above what they need to cover expenses – excluding the purchase of Treasury bonds to cover future retiree health insurance purchases.

  • postalnews

    I’m not sure what the politicians’ motives for backing PAEA have to do with the fact that the trust fund is an actual account in the Treasury, but since you asked:

    First of all, there wasn’t anything particularly secretive or sneaky about the passage of PAEA- there was a big signing ceremony, and both Democratic and Republican politicians praised it, as did some union officials. The main complaints I heard at the time were from USPS management- while they had no choice but to accept the law, they were not happy about having $5.5 billion in revenue skimmed off the top every year.

    The motive for the trust fund requirement in the law was to retain the artificial deficit reduction the USPS had been inadvertently providing by overpaying the CSRS retirement system. Because the USPS is off-budget, and CSRS is on-budget, that $5 billion artificially lowered the budget deficit by that amount. The new trust fund was also on-budget, so the politicians could keep counting on that extra $5.5 billion in phony deficit reduction. Don’t forget that the USPS had already been paying that extra $5 billion, so it didn’t seem like such a big deal at the time- and the money would eventually be used to pay future USPS expenses.

    The mistake a lot of people here make is assuming that PAEA was designed to destroy the USPS- that’s ridiculous. It was designed to streamline the rate-setting process, which it did, and to keep the USPS contributing to a phony deficit reduction scheme, while insuring that the money would eventually find its way back to the USPS.

    The problem is that circumstances have changed. The USPS no longer can afford that extra $5.5 billion every year. More importantly, it doesn’t NEED to put that much money away, even if pre-funding was a real necessity. But the politicians who made the mistake in 2006 are not willing to admit they screwed up. And the new radical right wing Republicans who control Congress are happy to pretend that the USPS is in a financial crisis so they CAN slice it up and sell it off.

  • freecountry

    So they can steal and spend the money on one of their causes. It should be returned to the American consumer since it is their money.

  • Gary Ferrari

    i guess Tom Carper has been using part of that 5.5 billion a year for his own personal agenda as are many others in congress. The money that the USPS pre-funded was actually used by congress to pay off other items. That’s what should be discussed and investigated where is the money the usps paid already? and which special interests groups received it?

  • postalnews

    The money that the USPS paid into the trust fund hasn’t been used for anything- it’s sitting in an interest bearing account in the Treasury as I’ve explained below. The problems the USPS are serious enough- please don’t spread misinformation here.

  • Gary Ferrari

    That is totally inaccurate
    According to the congressional end of year balance sheet the money was spent from 2009 – 2012 with basically an iOu replacing it
    Check it out

  • Engineer

    Gary is correct – the “interest bearing” security is actually an IOU from the government, promising to pay the trust back with interest. Same with the trust funds for social security. However, the good news is that it’s entirely likely that the government will pay back those bonds.

  • Not Indoctrinated

    Typical new world order crap from Carper which is one of our many communist leaders in the senate