The US Postal Service took in $40 million more than it spent in November, and after two months of the new fiscal year, has a net income of $152 million. In the private sector that would be called a “profit”. Thanks to Congressional accounting gimmicks, however, the USPS will report a net loss of over $1.8 billion for the two month period. The entire $1.8 billion loss is due not to USPS operations, but to legislation enacted by the Bush Administration and the GOP controlled Congress in 2006 that requires the USPS to contribute $5.6 billion to a so-called “trust fund”, which has so far amassed over $42 billion from USPS profits.
While right wing politicians claim the trust fund is simply a “prudent” measure, no other agency or company has a similar burden. The real reason for the requirement appears to be the shifting of billions of dollars of the national debt on to the USPS, which is, conveniently, “off-budget”. The politically induced “bankruptcy” also provides cover for draconian legislation proposed by Darrell Issa, which would dismantle USPS bargaining agreements, and set up a postal “death panel” to gut the service’s infrastructure.
As far as “real world” financial results are concerned, USPS expenses remained level with the prior year, but revenue was down 3.5%. The decline in revenue reflected the continuing drop in mail volume, which dropped 6.3%, or 2 billion fewer pieces of mail. Standard mail, which had shown some growth last year, is down 7.3% in FY 2012 so far. The only bright spot in the volume numbers was the 33.6% increase in shipping services volume. While ecommerce driven package delivery is an obvious growth opportunity for the USPS, the problem is that it still represents just 15% of total revenue.