Donahoe acknowledged that he had not studied the impact on lost mail volume and revenue of going to a five-day delivery schedule, and that his figure of $2 billion in potential savings was only an estimate.
That estimate lacks credibility because his previous estimates have been found to be wildly inflated by, among others, the Postal Regulatory Commission—in part because they don’t reflect the lost mail volume that would result.
“If we’re doing things that actually reduce the mail volume and reduce profitability, we’re heading in the wrong direction,” Sen. Jon Tester (D-MT) said. It’s startling that the postmaster general doesn’t understand that.
As questioning from Tester showed, the USPS has not actually studied the savings that would be derived from ending Saturday delivery, nor does it know what level of mail volume—and hence revenue—would be lost by reducing its days of service by 17 percent.
And as Sen. Carl Levin (D-MI) indicated, the postmaster general’s bid to unilaterally end Saturday delivery runs counter to both the law and the expressed will of Congress.
The Postal Service, by its own accounting, lost $2.4 billion in postal operations last year, with the bulk of the $15.9 billion in red ink attributable to the pre-funding mandate imposed by Congress on the Postal Service. That was a reduction by more than half from the $5.1 billion loss in 2011. And in the first quarter of fiscal 2013, the Postal Service reported a $100 million net profit delivering the mail.
The Postal Service is clearly in transition, but its financial situation is different from what the PMG is trying to portray.
Donahoe also said that the Postal Service is losing $25 million a day—another misleading statement. In fact, 80 percent of that has nothing to do with postal operations, but rather results from pre-funding, which is required of no other public agency or private company in the country.
Is the postmaster general misleading lawmakers in an effort to persuade them to adopt his draconian cuts—cuts that would hurt tens of millions of Americans and small businesses throughout the nation?
The postmaster general’s claims that polls show support for ending Saturday delivery are equally misleading. When people are given a false choice, such as between ending Saturday delivery or seeing stamp prices rise and/or the Postal Service go bankrupt, they choose the former. But when given a question that reflects the actual source of the red ink, such as whether they’d prefer to lose Saturday delivery or have Congress fix the pre-funding situation, they overwhelmingly choose the latter.
Instead of allowing the postmaster general to make counterproductive cuts in service that will put the Postal Service on a death spiral, Congress should address the pre-funding mandate—which accounts for 80 percent of all the red ink.
And the postmaster general should develop a business plan for the future that will allow the Postal Service to continue to provide Americans with the world’s best and most affordable delivery service.